Minutes  of  Hearing 


Before  Committee  on  Railroads  and  Transportation 
of  the  Pittsburg  Chamber  of  Commerce 


Subject : 

Discriminatory  Freight  Rates  on 
Pittsburg  Goal  to  Lake 
Erie  Ports 


Held  in 

Chamber  at  Pittsburg,  Pa. 
January  7,  1911 


Columbus,  O. : 

The  F.  J.  Heer  Printing  Co. 
1911 


THE  LAW. 


Section  1 of  the  Federal  Act  to  regulate  commerce  says : 

It  shall  be  the  duty  of  every  carrier  subject  to  the  provisions  of  this  Act  ta 
provide  and  furnish  such  transportation  upon  reasonable  request  therefor,  and  to 
•establish  through  routes  and  just  and  reasonable  rates  applicable  thereto. 

All  charges  made  for  any  service  rendered  or  to  be  rendered  in  the  trans- 
portation of  passengers  or  property  as  aforesaid,  or  in  connection  therewith,  shall 
be  just  and  reasonable,  and  any  unjust  and  unreasonable  charge  for  such  service 
or  any  part  thereof  is  prohibited  and  declared  to  be  unlawful. 

Section  13.  That  any  person,  firm,  corporation  or  association,  or  any  mer- 
cantile, agricultural,  or  manufacturing  society,  or  any  body  politic  or  municipal 
organization  complaining  of  anything  done  or  omitted  to  be  done  by  any  common 
carrier  subject  to  the  provisions  of  this  Act  in  contravention  of  the  provisions 
thereof,  may  apply  to  said  Commission  by  petition,  which  shall  briefly  state  the 
iacts ; whereupon  a statement  of  the  charges  thus  made  shall  be  forwarded  by 
the  Commission  to  such  common  carrier,  who  shall  be  called  upon  to  satisfy  the 
complaint  or  to  answer  the  same  in  writing  within  a reasonable  time,  to  be  speci- 
fied by  the  Commission.  If  such  common  carrier,  within  the  time  specified,  shall 
make  reparation  for  the  injury  alleged  to  have  been  done,  said  carrier  shall  be 
relieved  of  liability  to  the  complainant  only  for  the  particular  violation  of  law 
thus  complained  of.  If  such  carrier  shall  not  satisfy  the  complaint  within  the 
time  specified,  or  there  shall  appear  to  be  any  reasonable  ground  for  investigating 
-said  complaint,  it  shall  be  the  duty  of  the  Commission  to  investigate  the  matters 
-complained  of  in  such  manner  and  by  such  means  as  it  shall  deem  proper. 

Said  Commission  shall  in  like  manner  investigate  any  complaint  forwarded 
by  the  railroad  commissioner  or  railroad  commission  of  any  State  or  Territory, 
at  the  request  of  such  commissioner  or  commission,  and  may  institute  any  inquiry 
■on  its  own  motion  in  the  same  manner  and  to  the  same  effect  as  though  complaint 
had  been  made. 

No  complaint  shall  at  any  time  be  dismissed  because  of  the  absence  of  direct 
.damage  to  the  complainant. 

^ H5  H5  H5 

The  Interstate  Commerce  Commission  in  the  case  of  Corporation  Commis- 
sion of  the  State  of  North  Carolina  vs.  the  Norfolk  and  Western  R.  R.  Company 
et  al,  (Opinion  No.  1375,  decided  June  7,  1910)  says: 

•“It  is  well  settled  that  distance  is  always  a factor  to  be  taken  into  considera- 
tion in  the  determining  of  either  the  reasonableness  of  a rate  by  itself  or  in  con- 
sidering its  relation  to  rates  to  other  points ; but  it  is  equally  well  settled  that 
•distance  alone  is  not  controlling.  Competition  is  an  important  element,  and  there 
are  various  other  considerations,  all  of  which  must  be  taken  into  account  in  de- 
termining the  fact  whether  a particular  rate  or  a system  of  rates  is  or  is  not 
reasonable.  Shippers  and  receivers  of  freight  are  entitled  as  a matter  of  law 
to  rates  that  are  reasonable  and  that  do  not  operate  to  unduly  discriminate  against 
them.” 

Again  in  the  same  opinion  the  Commission  says  that  it  is  argued  that  be- 
cause rates  are  made  on  the  zone  system  any  reduction  of  rates  would  affect  and 
disturb  rates  to  a number  of  points  in  a wide  extent  of  territory,  and  adds : 

“Because  defendants  have  constructed  a system  of  rates  on  the  zone  or 
blanket  system  * * * is  not  reason  sufficient,  in  our  judgment,  to  justify  the 
collection  of  unreasonable  charges  to  any  point.  Every  city  is  entitled  to  the 
advantage  of  its  location  and  may  not  lawfully  be  subjected  to  high  freight  rates 
merely  because  carriers,  for  reasons  of  convenience  or  otherwise,  include  it  with 
a number  of  other  points  in  surrounding  territory,  which  latter  points  are  not 
similarly  situated.” 


(2) 


Y>  Wr|3 


RAILROAD  AND  TRANSPORTATION  COMMITTEE. 


Wm,  H.  Stevenson Chairman 

A.  J.  Bihler Vice-Chairman 

Ira  Bassett Traffic  Manager 

Logan  McKee  Secretary 

H.  W.  Dunlap,  Jas.  A.  Henderson,  C.  Phillips  Hill, 


A.  M.  Scott,  Edw.  Snodgrass,  Jr. 


v 1 


$ 


Mr.  Stevenson  : Gentlemen,  this  meeting  has  been  called  by  the 
Railroad  and  Transportation  Committee  of  the  Chamber  of  Commerce 
of  Pittsburg.  A communication  was  written  the  President  of  the  Cham- 
ber last  June,  complaining  of  the  situation  here  in  regard  to  the  coal 
rates  for  the  Pittsburg  District.  The  president  of  the  Chamber  referred 
those  communications  to  the  Railroad  and  Transportation  Committee. 
On  account  of  some  other  very  important  matters  that  were  before  the 
committee,  the  question  had  not  been  taken  up  until  very  recently,  and 
it  finally  evolved  into  this  meeting. 

Now  the  Railroad  and  Transportation  Committee  of  the  Chamber 
want  to  be  fair  to  all  sides  of  this  question.  We  are  not  criticising  any- 
body; but  we  know  that  the  discriminations  against  the  coal  interests 
of  this  section  have  been  so  acute  that  something  must  be  done.  And 
for  that  reason,  this  is  in  the  nature  of  a hearing  before  this  committee. 
We  are  here,  the  committee  is  in  the  room  and  we  are  anxious  to  hear 
both  sides.  We  want  to  hear  the  side  from  the  coal  industry  first. 

Now,  the  statement  is  made  that  the  discrimination  against  the  coal 
interests  in  the  Pittsburg  District  is  going  to  crucify  the  coal  business. 
Now  we  want  to  know  that,  because  it  is  of  great  interest  to  the  entire- 
community.  And  so  that  you  will  distinctly  understand  the  position  of 
■^A-this  committee,  I want  to  repeat,  that  this  is  in  no  sense  a meeting 
\ of  the  Chamber  of  Commerce,  but  it  is  a meeting  with  the  Railroad 
and  Transportation  Committee.  You  gentlemen  have  been  invited  to 
come  here  and  give  us  your  side  of  the  question.  We  expect  to  be  as 
3 fair  as  we  can  be  and  we  will  be  fair.  If  any  action  is  taken  after- 
Kj  wards  by  the  Chamber  of  Commerce,  it  will  be  after  a thorough  investi- 
gation by  the  committee.  And  I am  satisfied  that  a fair  report  will  be 
made  to  the  Chamber.  And,  if  such  report  is  made,  no  doubt  it  will  be 
adopted  by  the  Chamber.  I would  like  to  call  on  Mr.  Boileau  to  make 
a statement  before  the  meeting. 


(3) 


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MR.  BOILEAU'S  ADDRESS. 

Mr.  John  W.  Boileau:  Mr.  Chairman,  Members  of  the  Committee 
on  Transportation  and  Railroads : In  filing  this  complaint  I did  not  do 
it  until  after  I had  investigated  very  thoroughly  the  conditions  existing 
as  to  the  relation  of  the  different  coal  fields  from  which  the  tonnage 
originates  that  is  shipped  to  the  Lakes.  I went  to  work  and  prepared  a 
map.  showing  the  bituminous  coal  fields  and  the  ore  bodies  as  they  have 
similar  relations  to  one  another.  I will  explain  as  best  I can  their  physical 
relations  by  pointing  out  the  fields. 

(Mr.  Boileau  then  explained  the  map.) 

We  all  sincerely  thank  the  Transportation  and  Railroad  Committee 
for  the  privilege  of  presenting  our  grievances  in  this  freight  rate  situation. 

During  the  early  part  of  the  past  decade  there  was  much  opposition 
to  industrial  organization  and  it  was  a mistaken  resistance  as  to  what 
at  present  proves  to  be  a permanent  benefit.  Far  be  it  from  me  to  in  any 
way  hinder  the  progress  of  a great  corporation  that  is  necessary  for  our 
industrial  evolution,  but  if  the  capitalists  who  control  our  large  railroad 
interests  permit  selfish  motives  and  arbitrarily  develop  the  territory  more 
remote  from  markets  and  centers  of  consumption,  and  if  they  discriminate 
in  the  matter  of  freight  rates,  then  these  corporations  are  not  managed 
with  proper  regard  to  the  public  as  a whole.  Some  railroads  seem  to 
have  entirely  lost  sight  of  the  masses. 

The  parties  concerned  in  the  freight  rate  situation  are  certainly  not 
hostile  to  wealth  or  to  the  railroad  interests.  This  is  no  crusade  against 
the  railroads,  but  the  time  is  here  for  an  adjustment  of  the  unfair  con- 
ditions that  are  prevalent  in  the  territory  covered  by  the  Pittsburg  coal 
bed,  the  most  persistent  and  valuable  bed  of  coal  in  existence. 

Our  coal  and  coke  and  iron  and  steel  interests  want  the  natural 
position  we  have  to  be  considered  by  the  railroads  when  they  make  table 
of  charges  for  services  rendered.  In  the  assembling  of  the  ore,  the  coke, 
the  limestone,  and  the  coal,  and  the  shipping  of  coal  to  the  Lake  markets, 
our  position  has  meant  but  little  compared  with  the  service  rendered  the 
fields  more  remote  in  West  Virginia,  Virginia  and  Kentucky. 

Reason  as  you  may,  our  industrial  supremacy  and  activity  depends 
upon  our  holding  the  advantages  our  natural  position  gives  us. 

For  the  past  fifteen  years  I have  watched  the  development  of  this 
section  and  during  the  entire  time  I have  kept  much  data  on  the  Railroad 
and  coal  situation.  The  Railroads  are  the  medium  by  which  our  valuable 
fuel  reaches  the  points  of  consumption.  The  Railroad  has  been  the 
favored  one  in  the  past.  Rebates  used  to  be  in  vogue,  but  I dare  say 
that  there  is  but  little  direct  rebating  being  done  at  the  present  day.  It 
is  other  advantages  that  prevail. 

The  present  question  is  the  wide  discrimination  made  by  the  Rail- 


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roads  in  the  Appalachian  coal  fields.  It  is  no  doubt  true  in  other  fields. 
Different  conditions  and  influences  prevail  in  every  particular  mining 
district.  In  some  cases  the  traffic  men  and  other  officials  of  the  Railroads 
are  to  blame.  Some  times  they  are  personally  interested  and  in  a selfish 
way  have  forgotten  the  masses,  but  it  is  usually  the  powers  higher  up  that 
are  responsible  for  such  unjust  conditions,  and  as  we  are  meeting  here 
today  to  ask  for  a correction  of  such  evil,  they  frown  and  they  say  we 
are  trying  to  tear  down  their  great  institutions.  Just  wait  until  half  of 
the  case  is  presented  and  they  will  see  cause  for  our  complaint. 

What  has  resulted  because  of  this  selfish  attainment?  As  officials 
and  directors  of  those  organizations  they  are  largely  serving  themselves 
or  coal  companies  in  which  they  are  interested.  They  are  not  serving 
the  outside  party  who  holds  their  securities.  It  is  said  that  certain  Lake 
coal  service  is  being  rendered  by  Railroads  at  less  than  actual  cost  of 
such  service.  If  this  is  rendered  in  the  interest  of  individuals  or  cor- 
porations why  should  it  not  be  corrected?  Any  official  of  the  Railroads 
or  Coal  Companies  who  does  not  hold  the  interest  of  the  stockholders 
of  that  Corporation  in  an  honorable  manner  should  be  dealt  with  in  the 
proper  way. 

Every  coal  operator  of  the  Pittsburg  and  Ohio  and  Pan  Handle 
fields  is  duty  bound  to  aid  in  the  correction  of  this  coal  freight  rate 
situation.  Almost  every  ton  of  coal  going  to  Lake  Erie  or  for  Lake 
shipment  or  consumed  along  the  front  of  Lake  Erie  should  be  mined 
from  the  counties  of  Western  Pennsylvania,  West  Virginia  Pan  Handle, 
and  Eastern  Ohio,  and  I am  certain  would  be  mined  there  if  they  had 
the  proper  freight  rate  in  proportion  to  service  rendered.  Because  of 
favorable  conditions  existing  in  the  Fairmont  field  they  naturally  would 
get  a share  of  the  tonnage. 

We  have  the  spectacle  of  coal  being  hauled  490  miles  for  $1.12  and 
coming  in  competition  with  coal  being  hauled  160  miles  at  88  cents  per 
ton.  In  other  words,  Pittsburg  pays  to  the  Lakes  5.5  mills  per  ton  per 
mile,  while  New  River  District  pays  approximately  2.3  mills  per  ton  per 
mile.  The  Railroad  man  reasons  that  $1.12  is  24  cents  more  than  88 
cents.  Similar  reasoning  and  selfish  influences  has  caused  the  West 
Virginia  District  during  the  past  ten  years  to  increase  at  the  rate  of  74% 
per  year  in  its  coal  tonnage  to  the  Lakes ; while  Pittsburg  has  only  in- 
creased, from  1901  to  1910' inclusive,  about  22%  per  year,  and  during 
the  same  period  the  Ohio  District  has  only  increased  about  12%  per 
year.  In  other  words,  West  Virginia  had  a shipment  of  less  than  800,000 
tons  in  1901,  while  in  1910  she  had  almost  nine  times  that  tonnage. 

If  these  conditions  are  corrected  or  equalized  along  fair  lines  and 
the  selfish-gainspirit  of  some  interests  eliminated,  there  will  be  no  excuse 
for  the  antagonistic  attitude  of  the  people  toward  the  transportation 
companies  of  this  country.  If  they  put  into  force  policies  that  are  not 
right,  let  them  suffer  for  it.  How  little  consideration  some  of  the  hard- 


6 


faced  corporation  interests  give  the  operator,  and  as  in  the  case  in  this 
section  many  of  the  operators  would  like  to  present  their  case,  but  be- 
cause some  of  the  favored  ones  do  not  take  the  initiative,  the  little  in- 
dependent operator  can  do  nothing  but  hold  his  tongue.  He  is  not  con- 
tent with  this  position  and  condition.  He  has  seen  850,000,000  tons  of 
coal  taken  out  of  the  Pittsburg-Connellsville  field  during  the  past  10  years,, 
and  during  the  entire  time  there  has  been  no  extra  large  earnings  on 
the  coal. 

It  was  our  high  grade  steam  and  gas  coal.  A ton  of  coal  was  sold, 
but  for  little  more  than  what  it  would  cost  to  dig  and  handle  a wagon 
load  of  dirt.  Why  is  this?  Is  it  because  of  our  great  industrial  interests 
between  here  and  the  Lake  front  would  not  stand  a higher  price  for  the 
coal?  Is  it  because  the  Railroads  could  not  operate  if  they  paid  much 
more  than  a little  over  a dollar  to  $1.15  for  their  own  coal?  Is  it  be- 
cause the  coal  operators  in  this  District  need  a guardian  in  order  to  con- 
duct their  business  ? It  is  because  these  unfair  conditions  exist  in  a mul- 
titude of  ways. 

Should  the  Fairmont  District  -ship  coal-  to  the  Lake  front  for  the 
same  dollar  as  the  Connellsville  operator  would  pay  if  he  shipped  coal 
from  the  Lower  Connellsville  field?  He  does  not  ship  any  at  this  time 
but  the  rate  is  there  just  the  same,  but,  with  the  call  for  by-product  coke 
and  the  changes  in  our  industrial  position,  it  is  a matter  of  time  until 
he  will  ask  to  ship  coal. 

Fairmont  District,  as  you  see  on  the  map,  is  about  70  miles  farther 
away.  There  are  heavy  grades  out  of  the  Fairmont  field,  while  we  have 
an  easy  grade  between  here  and  Lake  Erie. 

From  the  Fairmont  field  the  Railroads  will  haul  coke  into  Cleveland 
for  the  same  price  they  haul  it  from  the  Connellsville  field  to  the  same 
point.  The  Fairmont  District  has  a 20  cent  per  ton  better  freight  rate 
east  than  the  Connellsville  field,  although  the  distance  is  no  greater. 

A detailed  study  of  the  situation  shows  that  the  Pittsburg  coal  field 
is  located  at  and  nearest  the  largest  fuel  consumption  in  the  world,  giv- 
ing it,  because  of  that,  a corresponding  value.  Leaving  out  Indiana  and 
Illinois,  100,000,000  tons  of  coal  or  more  is  distributed  from  the  Lake 
Ports  annually.  ' Indiana,  Illinois  and  Iowa  furnish  a part.  Then  there 
is  the  anthracite  tonnage. 

The  analysis  of  the  freight  rates  indicate  that  an  adjustment  is  im- 
perative in  order  that  tlie  coal  rates  may  be  reasonable  and  equitable. 
An  adjustment  of  equal  rates  per  ton  per  mile  will  add  value  to  every 
acre  of  our  Pittsburg  coal  bed.  We  should  receive  a freight  rate  in 
proportion  to  service  rendered,  and  at  the  same  time  other  conditions 
should  be  considered. 

We  have  on  the  map  the  Districts,  the  average  distance  and  the 
present  freight  rate  F.  O.  B.  Lake  front,  the  rate  mills  per  ton  per  mile 


7 


charged,  and  what  it  should  be  if  the  rate  was  made  3J  mills  per  ton 
per  mile. 

From  the  table  you  will’ see  that  the  local  rates  of  the  Pittsburg 
District,  including  Shenango  and  Mahoning  Valleys,  are  based  on  8 to  10 
mills  per  ton  per  mile.  That  Railroad  freight  rates,  per  ton  per  mile, 
from  the  Pittsburg  District  are  now  50%  greater  than  from  the  Fair- 
mont District,  and  are  from  90  to  100%  greater,  based  on  distance  hauled 
and  service  rendered,  than  from  thp  Kanawha,  Thacker,  Big  Sandy,  New 
River  and  Pocahontas  Districts. 

That  either  the  management  of  the  Railroads  hauling  the  coal  from 
these  coal  fields  are  losing  money  on  the  traffic  and  in  that  manner  dis- 
sipating the  money  of  their  stockholders  or  that  the  railroads  entering  the 
Pittsburg  District  are  taking  from  the  owners  of  Pittsburg  coal  lands 
at  least  30  cents  per  ton,  or  from  $2,000  to  $3,000  per  acre.  It  is  com- 
mon knowledge  that  hauls  of  over  100  miles  on  coal  traffic  give  dividends 
to  Railroad  stockholders  when  the  charge  is  not  in  excess  of  3^  mills 
per  ton  per  mile. 

An  average  round  trip  distance  from  the  Pittsburg  District  to  the 
Lakes  is  320  miles  — easy  grades  and  no  sharp  curves.  Return  ore  haul 
if  provided,  giving  a total  revenue  of  approximately  $1-75  f°r  the  round 
trip  of  320  miles. 

The  round  trip  from  the  Fairmont  field  is  500  miles;  the  revenue 
being  for  a large  portion  of  the  traffic  97  cents  or  $1.00  for  500  miles 
haul  on  account  of  cars  returning  empty. 

The  round  trip  from  the  other  fields  is : — Hocking  440  miles,  Ka- 
nawha 620  miles,  Thacker  760  miles,  Big  Sandy  820  miles,  Pocahontas 
910  miles  and  the  New  River  field  980  miles.  The  revenue  for  a good 
portion  of  this  traffic,  on  account  of  the  empty  return  hauls,  is  85  cents, 
97  cents,  97  cents,  97  cents,  $1.12,  $1.12  and  $1.12  respectively. 

It  is  clear  that  the  rates  must  decrease  on  Pittsburg  coal  to  the  Lake, 
the  demand  for  which  is  enormous,  and  is  now  growing  at  the  rate  of 
22%  annually.  The  re-adjustment  of  freight  rates  is  imperative. 
Whether  the  increased  iron  and  steel  products  are  manufactured  in  the 
Pittsburg  District  or  on  the  Lake  front  at  any  point  on  the  Great  Lakes, 
the  fuel  used  will  be  largely  Pittsburg  coal. 

If  3-J  mills  per  ton  per  mile  would  be  agreed  upon  as  a base  and 
multiplied  into  average  distances,  the  rate  from  Pittsburg  to  Lake  Erie 
on  Lake  coal  should  be  56  cents  per  ton ; Pittsburg  No.  8,  .525  cents 
per  ton ; Fairmont,  cents  per  ton ; Hocking,  77  cents  per  ton ; Kan- 
awha, $i.o8Ir  per  ton;  Thacker,  $1.33  per  ton;  Big  Sandy,  $1.43  per 
ton;  Pocahontas,  $i.$9J  per  ton,  and  New  River,  $1.71  per  ton. 

Can  the  Railroads  afford  to  haul  a 45  ton  car  of  coal  from  the  Pitts- 
burg District  to  Lake  front  for  less  than  their  present  charge  — $39.60. 
If  other  roads  can  pay  dividends  on  3 mills  per  ton  per  mile  with  the  dis- 
advantage of  single  track,  sharp  curves,  heavy  grades,  much  delay  in 


8 


handling  traffic,  I do  not  see  why  roads  that  have  every  natural  advantage 
cannot  give  us  a freight  rate  compared  with  that  in  force  from  those 
districts  more  remote.  We  have  the  heaviest  tonnage  district  in  the 
country  and  pay  heavy  freight  rates.  One-tenth  of  the  total  freight 
tonnage  of  the  United  States  originates  in  or  passes  through  this  District. 
We  are  paying  for  some  other  Districts  that  are  not  so  flourishing  in 
traffic  but  still  maintain  a railroad.  Our  District  gives  the  greatest  return 
of  profit  to  the  Railroads  traversing  it.  Whether  they  can  haul  coal 
to  the  Lake  at  20  cents  per  ton  and  come  out  even,  or  40  cents  and  make 
a profit,  that  is  to  be  figured  out.  The  Railroads  of  this  District  get 
88  cents  per  ton  for  hauling  coal  to  the  Lakes,  and  a little  figuring  will 
determine  how  much  they  make  on  each  45  ton  car  if  proper  allowances 
for  administration,  depreciation,  and  full  charges  are  made.  If  it  could 
be  hauled  for  20  cents  per  ton  that  would  be  $30  per  car  profit.  Look 
at  the  annual  reports  and  the  statements  made.  Look  at  the  dividend 
paying  and  then  ask  whether  we  are  to  allow  90,000,000  tons  of  coal 
go  out  of  this  District  per  year  with  but  little  return  to  the  operator. 
Many  an  operator  has  not  figured  his  first  investment,  but  sells  his  coal 
at  any  price  that  he  can  get.  The  taking  of  the  markets  away  from  us 
has  mainly  caused  this  condition.  There  has  been  increased  production 
in  all  districts,  but  there  has  been  increased  consumption  and  we  are  not 
getting  our  share  of  it. 

We  should  furnish  Ontario  with  coal  through  reciprocity,  but  for 
some  reason  or  other,  railroad  influences  and  even  some  of  our  larger 
producers  are  not  anxious  to  have  this  done.  The  reason  is  very  evident. 
It  would  hurt  some  interests  that  have  railroad  affiliations. 

Some  interests  do  not  want  these  rates  from  the  various  Districts 
disturbed.  They  think  if  they  are  the  relation  of  the  shippers  in  the 
central  part  of  the  State  of  Pennsylvania  will  not  be  the  same  as  at 
the  present  time. 

Nova  Scotia  coal,  while  of  inferior  quality,  could  be  used  in  the 
New  England  States.  We  could  send  8 or  10  million  tons  a year  to 
Ontario.  It  might  lose  some  tonnage  to  certain  coal  interests  but  the 
masses  would  benefit.  The  unfavored  operator  and  the  consumer  have 
rights  that  must  be  properly  regarded  and  respected. 

We  need  more  men  like  L.  D.  Brandeis.  He  told  me  of  the  great 
amount  of  ignorance  displayed  in  these  traffic  conditions.  Mr.  Brandeis 
spent  16  years  in  the  work  for  the  uplifting  of  the  masses  without  re- 
ceiving a fee.  Wall  Street  with  the  growth  of  special  interests  at  the 
expense  of  the  common  people,  is  not  countenanced  by  him.  He  has 
already  shown  the  Railroad  people  that  they  should  practice  economies 
and  analyze  commercial  conditions  fairly  and  they  would  not  have  to 
advance  freight  rates  and  would  still  have  a fair  margin  of  profits  over 
what  they  would  have  if  advanced  and  left  to  the  present  operating 
conditions. 


9 


This  Lake  coal  situation  cannot  be  blamed  upon  ignorance.  This 
situation  is  well  known  to  the  Railroads  and  it  must  be  explained.  When 
the  Railroads  were  giving  their  testimony  in  support  of  rate  increases, 
amazing  ignorance  of  the  situation  was  displayed,  and  the  conditions  that 
prevail  in  this  District,  because  of  this  discrimination,  are  as  absurd  as 
in  that  case. 

Every  consumer  in  the  Pittsburg  and  Lake  Districts  should  be  inter- 
ested in  this  freight  matter.  Our  local  rates  are  shown  on  this  map  and 
it  certainly  looks  high  for  service  rendered.  The  Railroads  are  not  to 
blame  for  all  these  unfair  conditions.  The  operator  is  to  blame  for  part 
of  it.  But  whether  operator  or  railroad  people  and  these  conditions  pre- 
vailing, I sincerely  trust  that  the  Transportation  and  Railroad  Committee 
of  this  Chamber  of  Commerce  goes  into  it  and  adjusts  the  whole  situ- 
ation. It  cannot  be  done  in  a month,  but  this  question  must  not  be 
allowed  to  sleep.  If  so,  just  so  long  will  we  be  in  the  position  we  are  in. 

Over  in  Allegheny  the  consumer  pays  $1.87-2-  per  ton  for  his  coal, 
as  a result  of  some  local  conditions  here  and  influences,  together  with 
transportation  charges.  That  condition  cannot  be  remedied  until  there 
is  a regular  adjusted  charge  for  our  local  plants.  We  cannot  expect 
diversified  industries  with  this  situation.  70  miles  away  in  Youngstown, 
Ohio,  with  a 10  mills,  per  ton  per  mile  charge,  or  70  cents  per  ton,  they 
pay  $2.65  per  ton  for  their  coal,  produced  by  the  same  Companies  that 
ship  coal  to  Allegheny.  Considering  the  service  rendered  in  the  haul 
and  the  taxes,  Mahoning  and  Shenango  Valleys  are  a better  place  for 
the  industrial  plant. 

This  question  is  not  by  any  means  new.  The  Pittsburg  Coal  Op- 
erators’ Association  last  year  undertook  to  do  something,  but  for  some 
reason,  possibly  influence,  the  matter  has  been  pigeon  holed.  They  made 
the  statement  that  the  freight  rate  on  coal  from  the  Pittsburg  District 
to  the  Lake  front  has  never  been  properly  related  to  existing  district 
conditions  or  properly  considered  in  relation  to  conditions  in  other  Dis- 
tricts, especially  since  the  large  and  distant  coal  fields  of  West  Virginia 
and  Eastern  Kentucky  have  been  developed,  the  tonnage  of  which  is 
not  directed  to  Lake  markets  in  competition  with  coal  produced  in  the 
Pittsburg  District ; and  the  maintaining  of  present  differential  rates  based 
on  present  conditions  in  all  districts  is  in  effect  an  increase  of  the  open 
rate  from  the  Pittsburg  District. 

The  high  freight  rate  charge  on  coal  and  coke  from  the  Pittsburg 
and  Connellsville  Districts  to  their  ultimate  markets  necessitates  the  ac- 
ceptance of  an  unprofitable  price  in  order  to  meet  competition  from 
these  lower  freight  zones,  which  fact  is  proved  by  the  annual  reports 
of  several  of  our  large  coal  companies. 

In  this  District  we  are  going  further  into  the  hills  for  our  coal, 
sinking  deep  shafts,  and  with  other  conditions  imposed  on  us,  together 
with  the  discrimination  in  freight  rates,  makes  the  southern  West  Vir- 


10 


ginia,  Virginia,  and  Kentucky  fields  easy  competitors,  as  the  conditions 
there  are  cheap  mining  rates,  mainly  outcrop  coal,  cost  of  development 
small,  and  with  every  inducement  to  reach  a market  in  competition  with 
our  coal  in  their  favor. 

What  we  want  is  equitable  freight  rates ; while  we  believe  that  exist- 
ing conditions  are  too  high,  measured  by  the  cost  of  this  furnishment, 
we  ask  that  our  rates  be  equitable  as  measured  by  the  rates  accorded  to 
our  competitors  in  the  same  markets. 

As  an  illustration  of  what  we  have  to  contend  with,  let  me  cite  a 
fact  that  in  itself  speaks  volumes  in  condemnation  of  our  transportation 
•companies.  Coal  that  goes  to  the  shores  of  Lake  Erie  for  loading  on 
"boats  for  transport  to  upper  Lakes  bears  a freightage  charge  of  88  cents. 
'If  after  it  reaches  there  it  is  diverted  to  local  fueling  in  any  of  the  cities 
of  fueling  towns  it  bears  an  additional  charge  of  io  cents  in  freightage 
and  an  additional  charge  of  not  less  than  $1.00  for  switching,  and  if  it 
is  loaded  on  a boat  that  carries  a cargo  for  itself  under  propulsion,  it  is 
charged  $1.03  rate,  although  the  coal  for  the  three  uses  may  come  from 
the  same  mine  and  be  hauled  by  the  same  locomotive. 

Another  fact  and  I will  conclude,  coal  and  iron  and  steel  products 
pay  the  biggest  profit  of  any  freight  hauled  by  the  railroads.  This  is 
because  it  is  loaded  by  the  shipper  and  unloaded  by  the  receiver,  both  of 
which  have  terminals  of  their  own,  so  that  all  the  railroads  are  obliged  to 
do  is  to  hitch  a locomotive  to  the  train,  which  is  commonly  made  up 
at  the  mines  or  mills  and  haul  it  to  destination.  On  merchandise  freight 
box  cars  are  a necessity,  so  are  warehouses  in  which  to  store  it  until 
loaded  to  keep  it  safe  from  wind  and  weather,  thief  or  other  and  until 
it  is  taken  out  by  the  consignee.  The  bulk  of  merchandise  freight  pre- 
cludes any  such  tonnage  per  car  as  with  coal,  or  ore,  or  pig  iron  or  steel, 
hence  the  earnings  per  ton  per  car  load  are  much  less  for  merchandise 
freight,  besides  there  are  the  liabilities  for  damage  in  transit  due  to  any 
•one  of  a number  of  causes,  while  with  coal  and  coke,  limestone,  ore, 
pig  iron  and  steel  there  is  little  damage  even  in  a wreck,  for  the  coal 
can  be  gathered  up  and  used  by  the  railroad  itself  for  fueling  its  loco- 
motive, the  coke  for  fueling  the  foundry  and  in  switching  locomotives 
in  city  limits,  and  the  ore  can  be  mostly  gathered  up  and  loaded  on 
another  car,  and  so  with  the  pig  iron  and  steel.  So  on  those  com- 
modities which  Pittsburg  mostly  ships  there  is  a maximum  of  profit  at  a 
minimum  of  cost  to  the  transporters. 

Many  times  have  these  questions  been  before  the  Railroads  and 
in  some  cases  attention  has  been  promised,  but  some  of  the  operators 
seem  to  think  that  the  railroads  think  they  have  a vested  right  to  keen 
their  hands  in  the  pockets  of  the  shippers  who  furnish  them  the  means 
of  paving  their  cost  of  operation  and  of  dividends  and  surplus  funds, 
from  which  they  buy  other  roads,  make  large  improvements,  build  fine 


II 


terminals,  and  with  this  before  us  we  think  it  is  time  we  were  being  given 
some  consideration. 

I thank  Chairman  Stevenson  and  his  Committee,  and  sincerely  trust 
that  proper  action  will  be  taken  toward  correcting  the  situation. 

Chairman  Stevenson  : Are  there  any  questions  that  any  one  would 
like  to  ask  Mr.  Boileau  while  he  has  the  floor?  Or  are  there  any  ques- 
tions in  regard  to  the  maps  or  the  figures  that  he  has  presented? 

Mr.  Boileau:  May  I make  a statement?  This  is  a very  heavy 
question.  I have  a stack  of  information  as  high  as  the  table  and  as 
large.  It  is  a broad  question  but  we  have  a man  with  us  here  who  willr 
I think,  analyze, the  whole  situation  as  he  has  spent  years  on  it  and  I 
would  rather  that  you  would  ask  him  the  questions  than  to  ask  me. 

Chairman  Stevenson:  Do  you  refer  to  Mr.  Manington? 

Mr.  Boileau:  Yes,  sir. 

Chairman  Stevenson  : Mr.  Howard  D.  Manington  of  the  Ohia 
Operators  Association  is  with  us  today  and  I will  call  upon  him  to  make 
his  statement. 

MR.  MANINGTON'S  ADDRESS. 

Mr.  Manington  : Mr.  Chairman,  Gentlemen  of  the  Committee  and 
Gentlemen:  The  question  as  to  the  reasonableness  of  the  rate  on  lake 
coal  from  the  Pittsburg  District  is  purely  and  simply  a question  of 
mathematics.  The  rate  is  either  reasonable  or  unreasonable.  It  may^ 
be  unreasonable  in  itself  or  unreasonable  by  comparison  with  other  rates 
for  similar  service. 

Of  all  the  districts  furnishing  lake  coal  Pittsburg  has  about  the 
shortest  haul.  It  is  true  the  haul  on  the  several  lines  from  the  Pitts- 
burg district  reaching  lake  ports  is  not  the  same,  but  for  comparative- 
purposes  it  is  practically  the  same  haul  to  the  ports,  so  that  the  considera- 
tion of  one  lake  rate  would  in  a large  measure  be  applicable  to  the  other- 
lake’  rates,  granting  that  there  are  other  differences  which  should  be  given 
due  consideration. 

From  my  understanding  of  the  matter  the  Pittsburg  operators  were 
the  first  to  make  complaint  against  what  has  been,  by  coal  operators, 
deemed  to  be  unreasonable  freight  rates ; and  yet  the  operators  of  this 
district  have  been  the  last  to  take  any  affirmative  action  looking  toward 
a reduction  of  such  rates.  I am  not  undertaking  to  say  why  this  is  so 
because  .1  frankly  confess  I do  not  know.  Certain  it  is  that  .no  change 
in  rates  beneficial  to  the  coal  interests  of  this  district  has  occurred  since 
complaint  was  first  made. 

Over  in  Ohio  we  have  made  some  progress  in  our  lake  rate  as  well' 
as  in  our  commercial  rate  controversy.  Our  first  case  was  thdt  submitted 
about  a year  ago  to  our  Railroad  Commission  and  decided  by  that  body 
in  February,  1910.  The  rate  under  challenge  was  the  lake  rate  on  the- 
Wheeling  & Lake  Erie  from  the  Pittsburg  No.  8 District.  You  doubt- 


12 


less  recall  that  the  Commission  reduced  this  rate  22|%,  or  specifically 
from  90  cents  to  70  cents  f.  o.  b.  vessel.  In  determining  this  question 
the  Commission  considered  the  cost  of  moving  the  coal  which  was  found 
to  be  40  cents  per  ton,  and  likewise  compared  the  defendant's  rate  of 
90  cents  with  the  proportional  rate  which  the  Pennsylvania  Company  re- 
ceives on  the  Norfolk  & Western  coal  over  the  “short  line”  from  Co- 
lumbus to  Sandusky  which  is  32.6  cents  per  ton  for  a haul  of  no  miles, 
holding  this  proportional  rate  to  be  compensatory.  The  Commission  held 
in  that  case  that  the  real  justification  for  the  acceptance  by  one  rail- 
road of  a proportional  rate  of  less  than  its  charge  for  the  same  haul  on  an 
originating  commodity  is  the  elimination  of  terminal  expense.  The 
Pennsylvania  Company  receives  the  coal  in  question  from  the  Norfolk  & 
Western  at  Columbus,  usually  in  trainload  lots,  therefore,  the  initial  ex- 
pense of  the  Pennsylvania  Co.  is  less  than  it  would  be  if  it- had  to  collect 
this  coal  from  the  mines  and  consolidate  and  classify  it  into  trains ; to 
that  extent,  and  no  more,  said  the  Commission,  is  the  Pennsylvania 
Co.  justified  in  charging  a proportional  rate  less  than  the  local  rate  where 
initial  expense  is  involved.  You  will  note  that  the  Pennsylvania  is  re- 
ceiving coal  at  Columbus  from  West  Virginia  for  much  less  than  half 
it  charges  Pittsburg  operators  though  the  two  coals  are  competitors  for 
the  same  market.  The  Commission  then  went  on  to  argue  that  the  85 
cent  rate  (with  5 cents  for  unloading)  on  coal  in  carload  lots  from  the 
No.  8 District  to  Huron  on  the  Wheeling  & Lake  Erie,  an  average  dis- 
tance of  155  miles,  yields  an  average  revenue  of  5.48  mills  per  ton  mile. 
The  evidence  disclosed  that  the  average  coal-train  tonnage  was  between 
1500  and  1600  tons  net.  By  taking  1400  tons  as  constituting  the  net 
tonnage  per  train  the  average  train-mile  revenue  on  coal  from  the  No.  8 
District  to  Huron  is  $7.67.  The  annual  report  of  the  Wheeling  & Lake 
Erie  for  the  year  ending  June  30,  1909,  showed  that  the  average  freight 
train-mile  earnings  of  that  road  for  the  year  was  $3.18  to  which,  the 
Commission  added  40%  to  cover  movement  of  empty  equipment  and 
found  that  the  average  train  mile  revenue  for  loaded  trains  was  $4.45 
which  included  all  classes  of  freight,  high  as  well  as  low,  long  and  short 
haul.  Our  commission  stated  that  it  is  a long  established  practice  and 
policy  of  carriers  that  low-classed  freight  be  taxed  proportionately  less 
than  high-class ; that  long  hauls  should  be  less  per  ton  mile  than  short 
hauls ; hence  it  follows  that  the  average  train-mile  revenue  should  be 
greater  than  the  train-mile  revenue  derived  from  the  transportation  of 
low-class,  long  haul  freight ; but  in  this  case  the  Commission  found  the 
singular  anomaly  of  a long  haul  on  freight  of  the  lowest  class  yielding 
more  than  the  average  on  all  commodities.  This  may,  or  may  not,  be 
true  with  respect  to  lines  serving  the  Pittsburg  district.  The  Commission 
dwelt  for  some  time  upon  this  phase  of  the  receipts  and  said: 

‘‘Possibly  the  average  per  ton  mile  revenue  is  too  low ; and  as  a consequence, 
the  total  revenue  derived  from  freight  transportation  is  not  adequate ; but  tne 


i3 


fact  that  the  total  revenue  does  not  bear  -the  correct  relation  to  the  total  cost, 
is  no  justification  for  the  imposition  on  a particular  movement,  or  a particular 
commodity  more  than  its  equitable  proportion  in  the  attempt  to  make  up  the 
deficit.” 

Much  stress  was  laid  by  defendant  in  this  case  upon  the  theory  that 
a reduction  in  the  No.  8 lake  rate  would  be  followed  by  similar  reduc- 
tions from  the  West  Virginia  fields,  so  as  to  prevent  an  increase  in  ship- 
ments from  the  No.  8 field,  such,  as  it  was  argued  by  complainants,  a 
reduced  rate  would  stimulate.  It  was  also  very  strenuously  maintained 
by  Mr.  Worthington,  receiver  for  the  Wheeling  and  Lake  Erie,  that  his 
company  could  not  take  care  of  an  increased  coal  traffic  even  should  the 
expectations  of  the  complainants,  as  to  increased  tonnage,  be  realized, 
because,  as  the  receiver  stated,  the  volume  of  the  coal  traffic  now  is  nearly 
up  to  the  capacity  of  the  railroad. 

The  Commission  did  not  consider  this  sort  of  defense  worthy  of  any 
weight,  holding  that  the  carrier  is  bound  to  provide  facilities  sufficient 
to  meet  the  demand,  stating  that  if  it  were  admitted  that  a carrier  could 
arbitrarily  limit  the  extent  of  its  business  it  would  be  admitting  its  power 
to  prevent  the  development  of  the  territory  it  traversed.  It  would  further 
justify  any  rate  the  carrier  might  see  fit  to  impose  with  a view  of  limiting 
the  ofiferings  of  freight  for  transportation. 

The  commission  also  expressed  the  view  that  the  Wheeling  & Lake 
Erie  could  take  care  of  an  increased  tonnage  from  the  No.  8 field  to  its 
lake  ports,  and  this  conclusion  has  been  amply  borne  out  by  recent  state- 
ment accredited  to  Mr.  Worthington  in  which  he  shows  an  increase  of 
18%  in  the  number  of  cars  of  coal  handled  by  his  company  for  the 
months  of  June  to  October,  1910,  over  the  same  months  for  the  year 
1907,  the  banner  year  of  that  road,  notwithstanding  the  fact  that  the  W. 
& L.  E.  Company  in  1907  had  2,000  more  cars  and  38  more  locomotives 
than  for  the  1910  period,  showing  an  estimated  average  gross  earning 
per  mile  for  the  year  of  $17,213,  and  the  estimated  average  net  earnings 
to  be  at  the  rate  of  $6,000  per  mile.  The  earnings  of  this  company  in 
1907  were  something  over  $13,000  per  mile,  and  a deficit  instead  of  a 
surplus.  The  traffic  density  on  the  main  line,  to  accomplish  the  results 
enumerated  by  Mr.  Worthington,  was  at  the  rate  of  6,351,522  tons  per 
mile  per  annum,  claimed  to  be  the  heaviest  track  density  on  any  single 
track  road  in  the  world.  It  is  interesting  to  note  that  Mr.  Worthington 
stated  in  his  recent  utterance  that  the  road  ought  to  haul  25%  more 
coal  in  1911,  than  it  did  in  1910. 

I have  gone  into  that,  gentlemen,  for  the  reason  that  whenever  a 
proposition  is  made  to  reduce  lake  rates  or  any  other  coal  rates  we  are 
always  met  with  the  things  that  a railroad  company  can’t  do.  Here  was 
a case  where  the  public  authority  refused  to  accept  those  statements, 
and,  within  a year’s  time  every  representation  that  was  made  by  the  rail- 


14 


road  company  has  been  overthrown,  and  the  judgment  of  the  state  au- 
thority has  been  sustained  and  more  than  amply  sustained. 

An  expert  recently  writing  upon  the  subject  of  the  Wheeling  & 
Lake  Erie  has  fixed  the  possibilities  of  this  road  in  the  next  six  or  seven 
years  at  $25,000  gross  per  mile  and  $10,000  to  $12,000  net  per  mile. 

I have  recited  these  facts  to  show  that  the  representations  made 
by  the  Wheeling  & Lake  Erie  at  the  hearing  before  the  Ohio  R.  R.  Com- 
mission have  proven  to  be  erroneous  in  these  very  important  particulars 
and  because  they  may  be  pertinent  to  your  situation.  I also  desire  to 
point  out  to  you  the  method  which  our  commission  followed  in  finding 
the  lake  rate  on  this  railroad  to  be  unreasonable.  Something  was  said 
at  the  time  about  this  road  being  in  the  bankrupt  court  b'ut  the  fact  that 
the  road  had  been  carried  down  by  its  parent  organization  had  no 
weight  with  our  commission  since  its  earnings  per  mile  then  were  suf- 
ficient to  make  it  profitable  had  it  been  honestly  capitalized,  and  the  ex- 
pectations of  the  commission  as  to  its  future  earning  capacity  have 
been  more  than  sustained. 

Chas.  F.  Spears,  expert  financial  analyst  whom  I quoted  a moment 
ago  in  respect  to  the  Wheeling  & Lake  Erie,  recently  in  another  article 
on  “Railroad  Tonnage  on  Coal,”  has  this  interesting  summary : 

“Most  coal  moves  at  a very  low  rate  per  ton  mile.  It  is,  however,  the  best 
paying  in  net  results  of  any  freight  handled  even  though  the  empty  car  move- 
ment on  coal  lines  runs  anywhere  from  30  to  40%,  which  would  bankrupt  a road 
carrying  only  merchandise  freight.  It  is  significant  that,  in  the  panic,  of  the  roads 
that  went  into  receivers’  hands  only  one  was  a coal  line.  Its  difficulties  were 
mainly  due  to  lack  of  facilities  for  larger  movement.” 

The  exception  was  the  W.  & L.  E. 

Somewhere  I saw  recently  a statement  from  Mr.  Worthington  to 
the  effect  that  the  cost  of  handling  lake  coal  from  the  Wabash  Pitts- 
burgh Terminal  was  approximately  16.3  cents  per  ton.  I presume  that 
refers  to  direct  cost.  I also  recall  that  28  cents  was  fixed  by  the  Bes- 
semer & Lake  Erie,  in  its  last  published  report  to  its  stockholders,  as 
the  cost  for  handling  coal  over  that  line. 

Each  of  these  roads  is  a single  track  road,  therefore  the  cost  of 
operation  is  greater  than  on  lines  of  two  or  more  tracks.  At  any 
rate,  it  is  hardly  probable  that  any  of  the  lines  serving  the  Pittsburgh 
district  have  a higher  cost  per  ton  in  handling  coal  than  these  two  roads. 
If  this  be  a true  cost  figure  for  direct  service  then  the  rate  on  Pitts- 
burgh coal  should  in  no  event  exceed  the  rate  made  by  the  Ohio  Com- 
mission upon  the  Wheeling  & Lake  Erie,  since  in  that  case  the  com- 
mission allowed  75%  profit  to  the  carrier  over  and  above  the  cost  of 
operation  as  found  in  that  case.  In  fact  the  rate  from  Pittsburg  could 
very  properly  be  less  than  70  cents  per  ton. 

Carriers  always  answer  that  the  lake  rate  is  made  less  than  ihe 


commercial  rate  to  the  same  ports  because  it  is  a part  of  a through  rate. 
It  is  not  made  in  conjunction  with  any  other  carrier  by  water  since  no 
through  rates  are  published  and  no  common  arrangement,  management 
or  control  exists  between  the  railroads  and  the  boat  lines.  Further,  the 
water  rate  fluctuates  during  nearly  every  season  of  navigation  depend- 
ing upon  the  activity  of  the  boat  lines,  but  the  railway  rate  to  the  port 
remains  stationary  during  the  season.  The  lake  rate  has  often  been 
compared,  and  in  my  judgment  very  properly  so,  with  the  rate  on  rail- 
road fuel  which  is  still  lower  than  the  lake  rate,  frequently  lower  by 
20%.  The  service  on  these  two  kinds  of  hauls  is  very  similar.  While 
one  may  have  an  advantage  in  some  respects  they  are  counter-balanced 
by  advantages  to  the  other  traffic  in  other  respects,  so  that  lake  coal  and 
railroad  fuel  are  of  about  equal  value  to  carriers  from  a transportation 
standpoint.  But  the  carriers  have  justified  a lower  rate  on  railway  fuel 
as  a part  of  a joint  rate  based  upon  some  point  of  possible  delivery. 
Admitting  for  the  sake  of  the  argument  that  the  railway  fuel  rate  is  a 
joint-rate  or  proportional  rate  on  what  would  be  a rate  to  some  point 
upon  the  line  of  the  connection  whose  coal  it  is,  if  that  rule  be  correct 
then  I fail  to  see  why  the  rate  on  lake  coal  should  not  be  made  precisely 
as  the  fuel  rate  is  made.  Lake  coal  is  also  destined  for  further  move- 
ment. For  that  reason  there  may  be  some  justification  in  making  a 
lower  rate  than  the  commercial  rate,  but  why  not  make  that  rate  the 
same  as  railway  fuel  rate  to  the  same  point  since  the  service  of  the  car- 
rier ends  at  that  point  for  both  movements,  and  both  movements  are 
very  similar  from  a traffic  view?  If  the  railway  fuel  rate,  being  20% 
lower,  is  a compensatory  rate  to  the  originating  carrier,  and  that  cannot 
be  denied,  then  the  lake  rate  must  be  at  least  20%  more  than  compen- 
satory. 

The  question  of  commercial  coal  rates  has  recently  been  thoroughly 
investigated  in  Illinois  where  the  carriers  proposed  a horizontal  advance 
of  about  10  cents  per  ton,  and  were  authorized  by  the  Railroad  & Ware- 
house Commission  to  make  an  increase  of  about  7 cents  per  ton. 

As  typical  of  the  Illinois  coal  carrying  roads  it  appears  that  in  1909 
.the  average  rates  per  ton  per  mile  on  coal  and  all  freight  over  the  prin- 
cipal Illinois  roads  were  as  follows : 

Coal.  All  Frght. 

C.  & A 3.44  mills.  5.20  mills. 

I.  C 3.50  “ 5.96  “ 

C.  & E.  1 3.59  “ 4.76  “ 

C.  C.  C.  & St.  L 3.28  “ 5.44  “ 

With  the  increase  of  7 cents  per  ton  authorized  by  the  Illinois  com- 
mission the  rates  of  these  roads  on  coal  will  still  average  considerably 
below  4 mills  per  ton  per  mile. 

As  an  argument  for  the  proposed  advance  in  rates  the  Illinois  car- 
riers presented  figures  showing  the  much  higher  rates  assessed  on  coal 


i6 


by  the  Pittsburg  and  Ohio  district  roads  for  similar  or  shorter  hauls. 
The  local  commercial  rates  from  Illinois  districts  to  Chicago,  etc.,  even 
on  the  increased  basis  are  relatively  lower  than  the  proportional  lake 
rates  from  Pittsburgh  and  Ohio  districts,  notwithstanding  the  fact  that 
the  Illinois  carriers  show  that  practically  100%  of  their  coal  equipment 
must  be  returned  empty,  and  that  switching  and  terminal  charges  absorb 
about  io  cents  per  ton  out  of  these  low  Chicago  rates.  On  nearly  every 
road  serving  the  Pittsburg  district  the  back  haul  is  about  70%  of  the 
forward  movement. 

In  the  Wheeling  and  Lake  Erie  hearing  before  the  Railroad  Com- 
mission of  Ohio,  it  was  brought  out  that  the  rates  on  coal  have  advanced 
substantially  during  the  past  ten  years.  This  was  due  in  part  to  the 
passage  of  the  Hepburn  law  and  partly  to  arbitrary  advances.  Before 
the  passage  of  the  Hepburn  law  rebating  was  a common  indulgence, 
little  attention  being  paid  to  published  rates.  When  the  law  became 
operative,  interdicting  rebates  under  heavy  penalties,  the  published  rates 
became  rigid  and  have  since  been  charged  in  full  on  coal.  While  these 
rates  have  been  advanced  in  many  instances  on  Ohio  and  Pittsburg  coal, 
the  freight  differentials  between  Ohio  and  West  Virginia  coal  have  like- 
wise been  further  narrowed  by  reductions  also  in  the  West  Virginia  rates. 

During  this  same  period  the  gross  earnings  of  all  the  lines  serving 
these  fields  have  increased  immensely.  The  average  increase  in  the 
United  States  is  about  10%  per  year,  but  the  lines  serving  the  Ohio  and 
Pittsburg  fields  have  shown  earnings  far  in  excess  of  the  average,  some 
of  them  as  high  as  20%  in  some  years  of  the  past  decade. 

As  illustrative  of  the  returns  to  the  Pittsburg  carriers  the  following 
figures  covering  the  P.  & L.  E.  may  be  interesting.  Of  its  total  traffic 
90%  consists  of  freight.  Of  its  freight  tonnage  about  80%  are  products 
of  mines,  such  as  coal,  ore,  etc.,  and  54%  of  coal  alone. 

For  the  calendar  year  1909  the  P.  cS:  L.  E.’s  gross  earnings  per  ton 
mile  were  $77,589  and  its  net  earnings  per  mile  $44,025.  I want  to  call 
vour  attention  to  the  fact  that  the  net  earnings  per  mile  of  the  P.  & L.  E. 
are  equal  to  the  gross  earnings  per  mile  of  the  next  largest  earning  rail- 
road in  the  United  States.  The  cost  of  operation  was  43.26%,  and  its 
net  income  was  56.74%,  an  achievement  unequaled  by  any  other  railroad 
in  this  country  and  perhaps  in  the  world. 

The  rate  per  ton  mile  was  7.29  mills,  having  progressed  from  5.8 
mills  in  the  past  decade,  or  over  25%.. 

Dividends  have  been  paid  annually  by  this  railroad  from  1892  to 
1909  at  the  rate  of  10%  except  for  the  years  1907  and  1908,  when  divi- 
dends were  12  and  11%  respectively.  In  February,  1910,  in  addition  to 
the  regular  dividend  an  extra  cash  dividend  of  40%  or  $6,000,000  was 
distributed.  That  is  doing  first  rate  for  a coal  road. 

More  tons  of  revenue  freight  are  hauled  on  the  191  miles  included 
in  the  Pittsburg  and  I ake  Erie  system  than  on  the  Lake  Shore,  or  the 


1 7 


Panhandle,  whose  1,500  miles  of  line  occupy  the  densest  traffic  territory 
an  the  east,  20  per  cent,  more  tons  than  on  the  Illinois  Central  and  the 
Louisville  and  Nashville,  with  4,500  miles,  and  10  per  cent,  more  than 
011  the  Burlington  with  9,200  miles  of  road.  This  gives  some  idea  of 
the  tremendous  volume  of  business  negotiated  by  this  company  whose 
tons  one  mile  are  twice  as  great  as  the  Pennsylvania’s,  three  times  as 
large  as  the  Baltimore  and  Ohio’s,  and  25  per  cent,  in  excess  of  the 
Bessemer  and  Lake  Erie,  which  ranks  next  to  it  in  this  traffic  measure- 
ment. 

To-day  its  gross  earnings  could  be  reduced  50  per  cent,  and  it  would 
still  earn  12  per  cent,  on  its  capital  stock.  Last  year  it  paid  an  extra 
•dividend  of  40  per  cent.  This  permitted  the  Lake  Shore  to  make  an 
additional  distribution  to  the  New  York  Central  of  $2,700,000  which,  in 
turn,  was  anticipated  in  an  increase  in  the  New  York  Central  dividend 
from  5 to  6 per  cent.  Pittsburg  and  Lake  Erie’s  net  earnings  would  pay 
nearly  4 per  cent,  on  the  entire  New  York  Central  capital  stock  of  $223,- 
000,000.  The  net  per  mile  of  the  subsidiary  is  nearly  double  the  gross 
per  mile  of  the  parent  company. 

The  average  revenue  per  train  mile,  in  1909,  was  $8.69  or  about 
three  times  the  average  for  the  United  States. 

In  eighteen  (18)  years  the  Pittsburg  & Lake  Erie  has  paid  upon 
the  stock  223%  in  cash  dividends.  From  July  1,  1902,  to  January  1, 
1910,  $11,000,000  of  the  company’s  $15,000,000  capital  stock  outstanding 
has  been  issued  for  cash  at  par  to  stockholders  though  the  value  of  this 
stock  was  incalculably  above  par.  During  this  time  the  company  has 
paid  out  of  earnings  enormous  sums  of  money  for  improvements,  bet- 
terments, etc.  As  another  has  said  “The  Pittsburg  and  Lake  Erie  is 
the  average  railroad  man’s  Utopia.” 

It  is  not  only  your  lake  rates  that  you  should  be  complaining  of ; 
your  commercial  rates  are  just  as  badly  out  of  line.  On  the  B.  & 
L.  E.,  for  instance,  the  rates  from  Risher  (North  Bessemer)  to  Erie 
range  from  6.3  mills  to  2.6  cents  per  ton  mile,  a distance  of  158  miles; 
on  the  Pittsburg  and  Lake  Erie  from  Pittsburg  to  Cleveland,  a distance 
of  135  miles,  the  rates  range  from  7 mills  to  1.1  cents;  from  Western 
Pennsylvania  via  the  New  York  Central,  Clearfield  to  Ulysses,  a distance 
of  209  miles,  rates  are  from  8 mills  to  1^  cents  per  ton  mile.  The  Penn- 
sylvania charges  Indiana  (Pa.)  coal  producers  $1.25  for  223  miles  to 
Erie,  , at  the  rate  of  6 mills  per  ton  mile,  while  hauling  West  Virginia 
coal  from  Columbus,  Ohio,  to  Sandusky,  Ohio,  a distance  of  no  miles, 
for  32.6  cents,  or  2.9  mills  per  ton  mile.  The  same  company  hauls  West 
Virginia  coal  from  Cincinnati  to  Indianapolis,  a distance  of  140  miles 
for  60  cents,  or  4.28  mills  per  ton  mile.  The  B.,  R.  & P.  rates  from 
Dubois  to  Buffialo,  a distance, of  161  miles,  are  from  7 mills  to  2.4  cents 
per  ton  mile.  The  rates  per  ton  mile  in  this  territory  are  probably  the 


2 


i8 


highest  of  any  coal  rates  in  the  territory  east  of  the  Mississippi  River 
and  north  of  Ohio  and  Potomac  Rivers. 

The  subject  of  the  lake  rate  is  not  a new  one  with  you,  nor  indeed 
with  coal  producers  in  Ohio.  For  some  few  years  past  you  have  been 
losing  your  markets  in  the  northwest.  We  in  Ohio,  who  live  on  the  lines 
connecting  directly  with  West  Virginia,  know  why  we  are  so  hardly 
beset  in  the  northwest,  as  we  have  visible  evidence  in  the  uncounted  train- 
loads of  coal  from  West  Virginia  passing  our  doors  on  the  way  to  the 
lake  ports  for  trans-shipment  to  the  northwest. 

I referred  a moment  ago  to  Lake  shipments.  By  reference  to 
statistics  I find  that  in  1901  the  Pittsburg  thick  and  thin  veins  had 
practically  56%  of  all  the  bituminous  shipments  by  water  while  West 
Virginia  had  less  than  13%.  In  1909  Pittsburg  had  42%,  13%  less  of 
the  total  shipments  than  eight  years  before,  while  West  Virginia  has 
26%  or  100%  more  than  at  the  beginning. 

The  Hocking  District  which  started  in  the  same  period  with  26%, 
finished  in  1909  with  8%.  This  entire  table  of  figures  shows  that  the 
districts  closest  to  the  lake  ports  have  fallen  behind  these  districts  more 
remote  from  the  lake  ports. 

It  is  idle  to  talk  about  the  difference  in  the  cost  of  producing  West 
Virginia  coal  or  the  fact  that  it  is  intrinsically  worth  more  money.  These 
two  facts  we  are  compelled  to  endure  and  will  do  so  without  complaint 
if  our  railroads  will  adjust  our  freight  rates  upon  a more  reasonable 
and  just  basis.  We  cannot  understand  why  there  should  be  but  12  cents 
difference  in  the  rate  on  lake  cargo  coal  from  West  Virginia  as  com- 
pared with  Ohio  coal  when  there  is  a 25-cent  difference  in  rate  on  com- 
mercial coal  between  the  same  points.  If  a 25-cent  differential  is  a just 
one  on  commercial  coal  it  also  should  be  applied  on  lake  coal. 

The  carriers’  officials  have  freely  admitted  in  private  conference, 
that  the  adjustment  of  the  rates  as  between  Ohio  and  Western  Penn- 
sylvania and  West  Virginia  is  not  fair  and  that  there  should  be  a re- 
adjustment, but  when  we  come  to  the  question  of  how  these  rates  should 
be  adjusted  it  is  always  proposed  to  raise  the  West  Virginia  rates.  That 
is  an  ignis-fatuus  to  the  coal  operators  of  these  two  States.  It  will  never 
be  done,  probably  for  the  very  good  reason  that  logically  it  cannot  be 
done.  The  railroads  have  made  a pretense,  of  attempting  to  raise  these 
West  Virginia  rates  which  propositions  have  been  opposed  by  the  en- 
terprising operators  of  West  Virginia  suing  out  injunctions,  and  again 
lately  by  the  action  of  the  Interstate  Commerce  Commission  on  petitions 
filed  with  it  by  independent  operators  suspending  recently  proposed  in- 
creased rates  pending  investigation. 

Railroad  companies  serving  that  field  have  maintained  the  present 
rates  to  West  Virginia  for  several  years  which  may  be  taken  to  be  good 
proof  of  the  fact  that  the  rates  in  themselves  are  reasonable  and  com- 
pensatory. It  is  doubtful  now  if  the  Interstate  Commerce  Commission 


19 


will  permit  an  increase  in  the  rates  from  West  Virginia  in  view  of  this 
fact,  and  in  the  light  of  the  further  fact  that  the  railroads  of  West  Vir- 
ginia have  shown  handsome  earnings  during  the  period  in  which  these 
rates  have  been  charged. 

The  Chesapeake  & Ohio,  for  instance,  whose  average  earnings  per 
ton  mile  are  but  4 mills  on  all  traffic  and  but  3.16  mills  per  ton  mile  on 
coal  traffic,  has  been  paying  dividends  after  putting  its  road  in  good 
condition. 

The  Norfolk  & Western,  with  slightly  increased  ton-mile  earnings 
over  the  Chesapeake  & Ohio,  has  likewise  improved  its  property,  met  all 
its  obligations  and  paid  its  dividends. 

These  are  some  of  the  facts  that  are  said  to  be  stubborn  things  and 
which  carriers,  even  if  they  were  in  good  faith  about  increasing  West 
Virginia  rates,  could  hardly  surmount  should  they  attempt  to  raise  these 
rates. 

I can  easily  believe  that  the  carriers  would  prefer  to  increase  West 
Virginia  rates,  since  it  would  mean  more  revenue  from  that  field,  and 
upon  coal  that  could  stand  increased  rates,  but  they  know  the  futility 
of  such  attempt.  Coal  operators  of  the  Pittsburg  District  have  been  fed 
with  that  sort  of  stuff  for  at  least  three  years;  meanwhile  West  Virginia 
has  increased  its  hold  in  the  northwest  and  Kentucky  coal  now  menaces 
and  bids  fair  to  be  a second  West  Virginia  as  a competitor  also  for  the 
northwestern  market.  Equally  vain  is  it  to  attempt  longer  to  frighten 
us  with  the  bugaboo  of  lower  West  Virginia  rates  to  meet  any  reductions 
our  roads  might  make. 

During  the  time  that  you  have  waited  this  re-adjustment  of  rates 
the  carriers  have  increased  their  earnings  tremendously  and  even  though 
at  the  time  you  first  complained  about  these  rates  they  were  -sincerely 
doubtful  of  their  ability  to  afford  you  this  relief,  the  more  recent  state- 
ments from  their  offices  should  convince  them  and  you  that  they  can 
afford  this  relief. 

The  principal  burden  of  the  song  of  the  railroad  officials,  at  the 
several  hearings  before  the  Interstate  Commerce  Commission  in  the  mat- 
ter of  the  challenge  of  the  increased  class  rates,  was  the  increased  cost 
of  operation,  particularly  the  increased  wages  which  they  are  compelled 
to  pay  their  employes  by  reason  of  the  exactions  of  the  union  from  them. 
I only  refer  to  this  to  remind  you  that  while  they  plead  that  excuse  as 
privilege  to  charge  the  public  more  for  their  services,  they  make  ab- 
solutely no  allowance  for  the  labor  conditions  which  are  imposed  upon 
you  by  a similar  labor  trust.  If  there  is  so  much  in  their  argument  of 
the  compulsion  under  which  they  are  placed  by  reason  of  their  labor 
•conditions,  you,  too,  should  have  some  consideration  on  the  score  of 
wages. 

In  the  making  of  this  lake  rate  the  carriers  have  not  taken  into 
•consideration  the  geographical  position  of  the  mines  of  the  Pittsburg  pro- 


20 


ducers  with  respect  to  the  markets,  nor  has  the  question  of  the  value 
of  the  service  to  the  shipper,  nor  the  cost  of  the  service  to  the  carrier, 
been  regarded.  Each  and  all  of  these  factors  should  be  considered. 

We  have  not  said  much  about  the  fact  that  these  rates  are  all  agreed 
rates;  that  they  are  made  by  concert  of  action  of  the  several  interested 
coal  originating  roads,  nor  that  such  action  and  such  manner  of  mak- 
ing and  maintaining  these  rates  is  in  violation  of  the  federal  statute.  I 
point  this  out  to  show  that  if  they  can  make  rates  in  this  fashion,  which 
are  prejudicial  to  your  interests,  at  least,  they  might  make  rates  in  the 
same  fashion  that  would  be  fair  to  the  public. 

We  are  met  with  the  statement  often  times  in  discussing  these 
problems  with  railroad  officials  that  some  West  Virginia  road  or  roads 
will  not  consent  to  a re-adjustment  of  the  rates  and  for  that  reason  they 
are  unable  to  grant  the  relief.  In  view  of  the  manner  in  which  these 
rates  are  made  and  maintained  nobody  has  been  deceived  by  that  state- 
ment. 

We  do  not  ask  that  West  Virginia  rates  be  raised.  We  are  not  ask- 
ing that  any  burden  be  placed  upon  West  Virginia  coal,  nor  that  the  cost 
of  West  Virginia  coal  be  made  greater  to  the  consuming  public.  We 
are  asking  only  that  we  be  given  just  and  reasonable  rates,  based  upon 
the  cost  of  the  service  to  the  carrier.  If  after  having  such  reasonable 
rates  accorded  us  we  cannot  keep  in  the  market  then  we  must  succumb. 

Not  all  the  wastage  in  the  production  of  coal  is  due  to  the  careless- 
ness of  the  miner,  the  inefficiency  of  or  unscientific  character  of  the  opera- 
tion. The  railroads  must  bear  their  share  of  the  criticism  for  the  ap- 
palling waste  in  coal  production  and  the  public  will  ultimately  pay  the 
bill. 

Lately  the  attention  of  the  federal  government,  and  of  the  country, 
has  been  focused  upon  the  conservation  of  our  coal  deposits  in  the  far 
West  and  in  Alaska.  Measures,  which  have  been  taken  in  this  regard, 
are  wholesome,  wise  and  timely.  But  it  seems  that  it  would  be  equally 
the  part  of  wisdom  to  conserve  those  measures  which  are  now  being 
operated  and  from  which  the  present  generation,  and  those  immediately 
following,  will  derive  their  fuel  supply.  No  one  is  going  to  be  hurt 
more  than  the  railroads  by  the  early  depletion  of  this  supply,  as  they 
are  not  only  affected  in  the  price  which  they  will  pay  in  the  future  for 
fuel,  but  the  vast  manufacturing  interests  along  their  lines  will  be 
similarly  influenced,  perhaps  being  compelled  to  move  on  in  the  search  of 
cheaper  fuel. 

From  these  statements  I conclude: 

(1)  That  the  Pittsburg  lake  rate  is  unreasonable  and  unjust,  meas- 
ured either  by  the  rule  of  comparison,  cost  of  service  to  the  carrier,  or 
value  of  service  to  the  shipper. 

(2)  That  the  rate  has  been  unlawfully  established  and  maintained- 


21 


(3)  That  the  necessary,  logical  and  actual  effect  of  this  unjust  rate 
has  been  prejudicial  to  the  operating  interests  of  the  Pittsburg  District. 

(4)  That  it  is  perfectly  clear  the  carriers  will  not  voluntarily  nor 
in  any  amicable  spirit  reduce  this  rate,  but  that  relief,  if  any  is  to  come, 
must  be  through  formal  legal  remedies. 

(5)  That  it  is  evident  from  the  financial  condition  of  the  carriers, 
earnings  and  other  factors  considered,  as  compared  with  their  condition 
at  the  time  these  rates  were  established,  they  can  well  afford  to  grant 
this  relief,  viewed  from  that  standpoint  alone,  to  the  end  that  this  great 
industry  which  has  contributed  so  much  to  the  carriers’  success,  may  be 
protected  and  fostered. 

(6)  That  the  coal  operators  of  the  Pittsburg  District,  in  order  to 
secure  that  consideration  to  which  their  geographical  location  entitles 
them,  and  to  prevent  being  overwhelmed  by  their  unduly  favored  com- 
petitors of  West  Virginia,  must  present  their  grievances  to  the  Interstate 
Commerce  Commission  for  its  investigation  and  judgment. 

Chairman  Stevenson  : Are  there  any  cjuestions  to  be  asked  of  Mr. 
Manington? 

Mayor  Magee:  I would  like  to  ask  whether  or  not  this  state  of 
affairs  is  true  only  about  coal  or  whether  there  is  a similar  discrimination 
on  other  commodities. 

Mr.  Boileau:  Ask  the  ore  people  and  the  furnace  people.  Mr. 
Chairman,  when  I mentioned  the  matter  to  three  or  four  furnace  people 
they  came  to  me  and  said,  “We  ought  to  be  in  on  that  arrangement;  we 
have  just  as  bad  conditions  as  that.”  I told  them  I had  nothing  to  do 
with  that,  that  that  was  up  to  them.  This  is  a coal  and  coke  proposition. 

Mr.  Stevenson  : The  ore  does  not  seem  to  be  represented  today. 

Mr.  Boileau  : No,  they  are  not  represented. 

Mr.  Stevenson  : Are  there  any  questions  to  be  asked  of  Mr.  Man- 
ington? If  not,  I would  like  to  call  upon  Mr.  Rowe  of  the  Coke 
Operators’  Association,  if  he  is  in  the  room.  We  would  like  to  have  a 
statement  from  him. 

MR.  ROWE’S  ADDRESS. 

Mr.  Rowe:  Mr.  Chairman  and  Gentlemen  of  the  Committee  and 
Gentlemen : As  spokesman  for  the  independent  coke  operators  I speak 
today  for  an  industry  which  represents  a present  value  of  something  like 
$50,000,000  in  land  and  plants.  It  is  no  inconsiderable  complaint  therefor 
which  we  come  to  make.  I apprehend  that  this  is  not  the  court  in  which 
the  complaint  is  to  be  tried  but  today  we  make  more  in  the  nature  of  an 
appeal  to  the  jury.  Consequently  the  mass  of  evidence  is  not  going  to 
be  before  you  because  it  would  be  tiresome  and  such  as  has  been  brought 
to  your  notice  does  not  need  to  be  repeated  in  the  matter  of  specific  rates 
and  practices. 

The  coke  operators  of  the  Connellsville  region  feel  that  they  are 


22 


obliged  to  enter  this  protest  because  their  industry  is  a vital  element  not 
only  in  the  Pittsburgh  district,  which  justified  our  invitation  to  attend 
this  meeting,  but  to  the  prosperity  of  the  nation,  since  this  is  an  age 
of  steel.  The  industry  is  absolutely  dependent  upon  the  steel  industry. 
It  is  nothing  more  or  less  than  a constituent  factor  of  that  industry.  It 
has  no  other  market  for  its  output  and  it  is  therefore  absolutely  un- 
able to  reckon  on  other  sources  for  equalizing  its  business.  The  hard 
times  in  one  line  of  business  are  not  offset  by  its  ability  to  market  .its 
product  in  other  directions  during  those  times.  It  is  an  exceedingly 
sensitive  business  on  that  account.  Its  nerves  center  in  the  nerves  of  the 
steel  business.  Anything  which  depresses  that  business  depresses  the 
coke  buiness.  Its  products,  although  not  perishable  in  the  ordinary  sense 
of  the  word,  is  so  to  some  extent  since  the  value  of  its  product  very 
rapidly  lessens  after  it  is  once  manufactured.  That  is  due  partly  to  a 
supposed  deterioration  in  its  quality  after  manufacture.  It  is  due  also 
to  the  actual  obstacle  imposed  by  its  bulk  which  requires  immense 
storage  room.  And  by  the  further  fact  that  re-handling  breaks  it  up 
and  consequently  the  coke  operators  are  compelled  to  do  a business 
which  is  really  hand  to  mouth.  He  cannot  utilize  a storage  warehouse 
as  a.  safety  valve  to  take  up  the  depressed  time  in  his  business  and  op- 
erate his  business  on  a more  equalized  fashion.  That  gives  these  vari- 
ous factors  which  make  it  such  a sensitive  business  and  place  a weapon 
in  the  hands  of  the  transportation  interests ; because  they  have  it  within 
their  power,  by  the  manipulation  of  the  transportation  rates,  to  divert 
the  profits  of  the  business  into  their  own  treasury.  And  we  charge  that 
this  has  been  done  in  some  instances,  which  have  been  presented  to  you 
by  Mr.  Boileau. 

Again,  the  cost  of  production  in  the  coke  business  has  been  very 
rapidly  advancing.  Every  ton  of  coal  put  into  the  ovens  has  to  be  mined 
farther  and  farther  from  the  pit  mouth.  Every  year  the  safeguards  of 
the  lives  of  the  working  men  impose  an  additional  cost  on  every  ton 
taken  out.  Both  of  these  costs  are  matters  which  cannot  be,  and  if 
they  could  be  would  not  be,  eliminated ; because  it  is  our  purpose,  of 
course,  to  meet  the  advance  of  civilization  by  the  betterments  in  pr6- 
duction,  which  inevitably  means  greater  expense. 

I advance  these  considerations,  not  simply  as  a hard  luck  story,  but 
because  of  this  fact,  to  make  it  plain  that  the  business  is  of  such  a 
nature  that  if  the  transportation  charges  on  its  product  are  uncontrollable, 
or  if  they  are  controllable,  or  controlled  by  the  railroad,  with  its  selfish  in- 
terest to  promote,  then  it  constitutes  the  weapon  in  the  hand  of  the  rail- 
roads, as  I have  said  before,  to  divert  the  profits.  It  would  be  possible 
for  the  railroad  people  to  shut  down  the  industry  in  any  one  district,  if 
their  selfish  interests  were  sufficiently  large  in  other  directions  to  war- 
rant them,  from  their  standpoint,  in  doing  so.  There  is  nothing  else 


23 


in  the  business,  giving  the  operator  the  power  to  offset  an  excessive 
transportation  charge. 

A 20-cent  differential  on  the  transportation  charge  from  the  Con- 
nellsville  district,  means  a tax  of  approximately  $1500  on  every  acre  of 
property  that  the  Connellsville  operators  own.  It  means  a ten  per  cent, 
tax  on  their  gross  market  price.  It  is  more  than  that.  It  is  a percentage 
more  nearly  13%  on  the  average  market  price  of  Connellsville  coke  for 
the  last  five  years.  Under  any  operating  conditions  in  any  line  of  busi- 
ness today,  no  manufacturer  needs  to  be  told  that  a ten  per  cent,  tax  on 
his  gross  price,  comes  dangerously  near  to  eliminating  nearly  all  of  his 
net  profits. 

It  has  been  repeatedly  said  by  the  other  speakers,  and  we  may  say 
it  for-  the  coke  operators  once  for  all,  if  your  please,  that  we  are  here 
.simply  for  fair  play.  It  is  to  be  hoped  that  the  railroad  interests  in 
meeting  this  complaint  will  not  waste  any  precious  time  in  demanding 
fair  play;  becaus.e  we  desire  to  say  at  the  outset  that  that  is  granted. 
Nothing  but  fair  play  is  wanted,  and  nothing  but  fair  play  is  intended 
upon  our  c>wn  part.  There  is  no  desire  to  antagonize  the  railroads  in  a 
spirit  of  animosity  or  hostility  at  all;  because,  if  the  complainants  in 
this  matter  had  it  in  their  power  to  carry  their  points  to  the  ultimate 
selfish  ends  which  they  might  have,  the  question  would  not  then  be 
.settled;  because  things  in  America  are  not  settled  until  they  are  settled 
right.  And  we  propose  that  the  freight  rate  situation  shall  not  be  settled 
until  it  is  settled  right.  A few  instances  of  the  discrimination  of  which 
we  complain  may  be  mentioned,  from  the  standpoint  of  coke  operators. 
The  bulk  of  the  considerations  advanced  here  today  have  had  to  do  with 
the  coal  rate  to  the  lakes.  We  naturally  speak  for  the  coke  freight 
situation  to  the  lakes  and  elsewhere.  Here  is  an  example.  The  Fair- 
mont district  is  approximately  40  miles  farther  from  Philadelphia  than 
the  Connellsville  district,  approximately  so.  The  average  distance  of 
the  Connellsville  district  is  120  miles  from  Cumberland,  the  junction 
point  of  the  two  branches  which  serve  the  Connellsville  and  the  Fair- 
mont district  respectively.  While  the  town  of  Fairmont  is  163  miles 
from.  Cumberland.  So  we  may  say  approximately  that  Fairmont  is  40 
miles  longer  haul.  The  B.  & O.  Railroad  hauls  coke  to  the  Philadelphia 
■district  from  the  Fairmont  region  for  $1.95  per  ton.  From  the  Con- 
nellsville district  the  rate  is  $2.15  a ton.  By  what  process  a lower  rate 
is  given  for  a longer  haul  it  is  not  easy  to  imagine.  That  20  cents  dif- 
ferential in  this  specific  instance,  as  I pointed  out  before,  amounts  to  a 
tax  on  the  Connellsville  coal  of  $1,500  per  acre;  which  represents, 
probably  in  the  case  of  some  operators,  50  per  cent,  of  their  possible 
gross  profits  in  the  entire  term  of  their  operations,  from  the  time  they 
sink  a shaft  till  the  time  they  abandon  their  workings ; which  may 
mean  anywhere  from  ten  to  twenty  years  of  workings.  And  the  rail- 


24 


road,  by  that  differential,  simply  puts  its  hand  into  the  pocket  of  the  op- 
erator and  makes  the  operator  work  for  the  railroad  half  his  lifetime. 

The  same  20-cent  differential  appears  in  another  case.  Last  April 
the  rate  from  Connellsville  to  Buffalo  was  arbitrarily  advanced  20  cents. 
The  word  “arbitrarily”  is  used  advisedly.  It  was  arbitrarily  raised  be- 
cause the  rate  was  raised  from  Connellsville  and  from  no  other  point; 
and,  further,  no  reason  was  given  for  raising  the  Connellsville  rate  20 
cents  to  Buffalo.  If  that  does  not  constitute  an  arbitrary  action,  I can- 
not imagine  what  would.  An  excuse,  however,  has  been  given  for  that 
advance.  In  a hearing  of  the  protest  filed  by  the  Buffalo  furnace  in- 
terests before  the  Interstate  Commerce  Commission,  the  railroad  people 
were  put  on  the  stand  and  gave  this  excuse.  It  had  been  complained  by 
the  eastern  Pennsylvania  furnace  people  that  they  could  not  compete 
in  the  New  England  territory  with  their  pig  iron  with  the  pig  iron  manu- 
facturers in  the  Buffalo  district.  The  railroads  were  appealed  to  to 
help  them  out.  Now,  the  distance,  as  you  can  see  on  the  map.  is,  I pre- 
sume, approximately  equal,  possibly  a difference  in  favor  of  Philadelphia 
on  the  whole.  They  were  not  complaining  about  the  freight  rate  on  their 
pig  iron  but  the  peculiarity  of  the  situation  lies  in  this : that  instead  of 
asking  the  railroads  to  give  them  a lower  rate  on  their  pig  iron  from 
their  furnaces  to  the  New  England  market  they  go  back  a step  farther 
and  go  over  the  shoulders  of  the  furnaces  and  ask  the  railroads  if  they 
would  not  please  make  the  Buffalo  pig  iron  cost  the  Buffalo  furnace 
man  20  cents  more  a ton,  sidestepping  the  freight  rate.  Let  me  repeat. 
They  asked  the  railroads,  and  the  railroads  do  it,  to  make  the  Buffalo 
man’s  pig  iron  cost  him  20  cents  more  a ton  so  that  he  cannot  undersell 
the  Philadelphia  pig  iron  in  New  England.  The  way  to  do  that,  of 
course,  as  the  railroad  people  have  nothing  else  to  sell  to  the  Buffalo 
furnace  people  except  transportation,  is  to  put  up  his  transportation  rate- 
20  cents  a ton,  and  the  trick  is  turned.  I wonder  if  you  other  furnace 
men  could  get  the  railroads  to  help  you  out  in  some  other  way  like  that 
if  you  needed  it?  It  was  probably  a case  of  need  on  the  part  of  the 
eastern  furnace  men.  That  simply  means  to  the  Connellsville  coke 
operator  an  absolute  shut  out  from  the  Buffalo  district  for  the  Con- 
nellsville coke.  Because  there  is  coke  from  other  districts,  as  I said 
before,  that  did  not  have  its  freight  rate  advanced.  The  Buffalo  people 
were  using  Connellsville  coke  very  largely.  That  obliges  them  either  to 
stay  out  of  the  New  England  market  in  competition  with  the  eastern 
furnaces  or  to  buy  their  coke  from  a district  whose  freight  rate  has  not 
been  advanced.  That  explains  the  charitable  attitude  of  the  railroads 
as  some  of  you  may  understand  on  the  ground  of  a community  of  in- 
terest — at  least  as  alleged  by  those  who  have  filed  their  complaints  with 
the  Interstate  Commerce  Commission.  This  matter  is  still  up  before 
the  Commission  and  will  be  tried  out  and  probably  some  relief  will  be 
afforded. 


25 


Another  incident  is  only  a matter  of  suspicion,  but  the  suspicion  is  so- 
grave  that  it  is  worth  while  speaking  it  out  in  public.  It  has  never  been 
satisfactorily  answered  on  the  part  of  the  railroads.  There  are  some 
abandoned  ovens  in  the  Connellsville  district,  whole  banks  of  ovens 
abandoned  because  the  coal  which  they  formerly  coked  has  been  worked 
out.  Now,  a great  many  of  those  ovens  during  a period  some  few  years 
back  suddenly  became  active.  The  coal  did  not  come  out  of  the  ground 
under  them  as  it  had  been  in  former  years,  but  it  was  hauled  from  some 
other  point.  And  after  it  was  coked  it  was  shipped  to  the  furnaces. 
Now  then,  at  a time  when  that  question  was  brought  up  with  the  rail- 
roads it  is  true  that  the  consumers  of  that  coke  could  go  in  the  open 
market  and  buy  the  coke  for  $1.65  a ton.  The  coke  which  they  were 
actually  using  cost  them  a figure  which  you  may  reckon  or  arrive  at  in 
this  way.  It  cost  so  much  per  ton  to  mine  it,  the  freight  rate  on  the 
coal  from  the  mine  to  the  ovens  was  so  much,  the  cost  of  the  coking  was 
so  much,  and  the  cost  of  hauling  the  coke  from  the  oven  to  the  furnace 
was  so  much.  Now,  if  that  can  be  done  at  a less  cost  than  for  the  furnaces 
to  buy  coke  at  some  other  plant  which  makes  it  and  cokes  it  at  the  pit 
mouth,  there  is  good  reason  to  understand  why  they  lighted  those  dead 
ovens.  As  a matter  of  fact,  if  the  cost  of  the  coke  made  in  these  dead 
ovens  was  made  up  in  the  manner  that  I have  outlined,  of  those  four 
factors,  it  cost  them  $3.40  per  ton,  at  a time  when  they  could  buy  it  in 
the  open  market  at  $1.65  a ton.  Consequently  as  those  furnaces  were 
not  in  business  for  their  health  to  give  75  cents  profit  to  somebody  by 
buying  coke  which  presumably  cost  them  $3.40,  there  was  some  factor 
in  those  four  factors  which  was  not  costing  them  what  it  was  supposed 
to  cost.  The  common  understanding  is  that  the  difference  in  cost  was 
eliminated  by  giving  a freight  rate  from  the  mine  to  the  furnace  through, 
ignoring  the  unloading  of  the  coal  and  its  conversion  into  coke  and  its 
reloading.  Now,  that  is  a matter  which  will  bear  looking  into.  It  is  a 
matter  which  indicates  to  the  railroad  gentlemen  present  why  we  wish 
to  make  an  examination  into  the  whole  question.  There  are  some  of 
these  things  that  look  unreasonable  from  the  ordinary  methods  of  busi- 
ness figuring.  We  feel  that  there  must  be  something  in  the  woodpile, 
and  we  propose  to  take  the  woodpile  down  stick  by  stick  until  we  get 
to  the  bottom  of  it.  If  the  coke  operators’  position  in  this  matter  is  not 
made  plain  and  clear  today  you  must  charge  it  up  to  the  present  speaker 
who  cannot  claim  to  be  anything  like  as  well  versed  in  the  whole  situa- 
tion as  the  two  speakers  preceding.  But  it  does  not  take  a great  while 
for  anyone  looking  into  the  subject  for  a little  time  as  I have  to  discover 
that  there  are  very  promising  leads  which  if  followed  up  must  afford 
relief  when  laid  before  the  proper  authorities. 

The  output  value  of  the  coke  operations  in  the  Connellsville  region 
independently  owned  will  run  probably  ten  to  thirteen  million  dollars 
per  year.  And  a simple  20-cent  differential  on  the  freight  rate  will  come- 


26 


to  something  like  $5,000,000.  That  is  such  a large  proportion  on  the 
whole  value  of  the  Connellsville  coking  output  that  it  is  a matter  of 
grave  concern.  It  puts  into  larger  figures  what  I said  before,  that  it 
becomes  a question  of  diverting  profit  from  the  man  who  is  operating 
the  mine  to  the  man  who  is  simply  hauling  the  coke. 

These  matters  have  grown  into  their  present  unbearable  proportions, 
as  has  already  been  said,  partly  because  the  railroads  are  at  fault,  partly 
because  the  operators  may  have  been  at  fault  in  permitting  errors  to 
grow  to  a point  where  they  have  been  entrenched.  The  world  needs  the 
Connellsville  coke  and  there  has  been  more  or  less  of  a feeling  of  se- 
curity on  the  part  of  the  Connellsville  operators  which  has  kept  them 
so  busy  making  Connellsville  coke  that  the  situation  has  grown  up  almost 
without  any  attention  on  their  part.  It  has  emerged,  however,  into  an 
active  question  because  our  cost  of  production  is  coming  to  a point 
where  the  cost  of  transportation  figures  in  it  so  largely  as  to  become 
dangerous.  For  that  reason  the  Connellsville  region  has  only  begun 
this  agitation,  just  as  the  Pittsburg  Chamber  of  Commerce  has  done, 
and  it  cannot  be  allowed  to  rest  because  of  the  immense  amount  of  prop- 
erty involved  in  the  whole  transaction.  The  whole  American  people 
are  interested  in  an  industry  so  large  as  this.  And  it  will  demand  an 
impartial  study  and  as  kindly  treatment  as  we  are  able  to  give  our  op- 
ponents. We  do*  not  want  to  enter  into  the  struggle  simply  to  vanquish 
somebody  and  put  them  out  of  business.  We  simply  want  a chance  to 
run  our  own  business  at  a reasonable  profit. 

Ch  airman  Stevenson  : Mr.  Manington,  I would  like  to  ask  you  if  I 
understood  you  in  one  of  your  four  conclusions  to  state  that  you  be- 
lieved the  only  solution  of  this  question  was  by  legal  action,  and  how 
far  that  point  reflects  the  sentiment  of  the  coal  operators.  Is  that  the 
only  thing  to  do  ? 

Mr.  Manington  : Well,  I conclude  that,  Mr.  Chairman,  from  the 
fact  that  perhaps  for  three  years  the  operators  of  the  Pittsburg  district 
have  been  on  their  knees  to  the  railroads  and  they  are  still  there  and  their 
rates  have  -not  been  changed.  Now,  of  course,  they  may  continue  to 
supplicate,  and  pay  the  price.  It  is  a natural,  it  is  an  inevitable  con- 
clusion. I believe  that  some  of  the  railroads  may  be  entirely  frank  when 
they  say  that  they  cannot  change  the  situation.  I can  well  understand 
why  the  P.  & L.  E.  cannot  change,  because  its  parent  won’t  give  its 
consent.  Its  parent,  which  is  the  New  York  Central,  does  not  make  one 
dollar  of  earnings  on  its  own  property,  but  must  depend  on  the  P.  & L.  E. 
to  pay  the  stockholders  of  the  New  York  Central  their  dividends  — the 
P.  & L.  E.  and  the  Lake  Shore.  So  that  I can  well  understand  how 
the  P.  & L.  E.  cannot  change  the  rate.  I can  understand  why  the  Wheel- 
ing & Lake  Erie  cannot  change  it,  because,  though  it  is  in  the  hands  of 
a receiver,  appointed  by  a Federal  Court,  the  people  of  this  country 
have  begun  to  understand  that  there  are  powers  greater  than  the  Federal 


27 


government,  of  the  United  States,  and  the  consent  of  those  powers  will, 
not  be  given.  If  the  operators  feel  that  they  are  being  discriminated 
against,  it  is  my  deliberate  judgment  that  they  will  never  get  relief  until 
they  force  that  relief  by  legal  action. 

Chairman  Stevenson  : There  are  many  gentlemen  here  that  are 
well  informed,  to  talk  on  this  question,  that  is  of  so  vital  interest  to  them ; . 
and  we  will  now  have  some  informal  talks,  from  any  gentlemen  that  are 
present  who  so  desire.  We  would  like  to  have  them  brief  and  to  the 
point.  It  is  getting  late,  and  if  anyone  wishes  to  say  anything  in  regard 
to  the  attitude  taken  by  Mr.  Manington,  this  committee  would  be  very 
glad  to  hear  him.  That  is  a very  important  question  for  this  committee 
to  consider.  If  the  coal  and  coke  operators  propose  to  go  ahead  and. 
institute  legal  proceedings,  at  this  stage  of  the  game,  this  committee 
wants  to  know  it.  If  they  want  to  continue  to  supplicate,  the  Chamber 
of  Commerce  is  going  to  help  them  supplicate  and  make  their  prayers  for 
them,  if  we  can,  but  we  would  like  to  have  this  question  very  thoroughly 
threshed  out  and  discussed  this  afternoon.  So,  gentlemen,  do  not  hesi- 
tate to  speak  your  minds  promptly. 

Mr.  Kennedy  : Mr.  Chairman,  I am  sorry  to  say  I am  not  pre- 
pared to  say  very  much  on  this  subject,  because  I do  not  know  the  figures, 
and  I do  not  like  to  say  very  much  about  things  that  I am  not  very 
well  prepared  on,  but  I do  know  that  it  is  a very  broad  subject.  I do 
know  that  there  are  a great  many  interests  concerned  in  it,  and  they  have 
to  be  harmonized.  I know  it  may  be  hard  for  any  one  railroad  to  make 
any  movement  in  this  direction  at  all.  I have  been  greatly  interested 
in  hearing  the  figures  of  the  gentleman  from  Ohio,  who  has  evidently 
studied  the  matter  very  thoroughly;  and,  from  a limited  knowledge  of 
the  subject,  I am  inclined  to  think  that  many  of  his  conclusions,  at  least, 
are  absolutely  correct.  It  would  sound  that  way  to  me.  But  I would  like 
to  hear  from  some  of  our  railroad  friends  today.  If  there  are  any  of 
them  who  can  pick  any  flaws,  I would  like  to  hear  them  picked,  and  would 
like  to  get  all  the  light  we  can  on  the  thing.  I do  not  think  we  will  ever 
get  much  by  glittering  generalities  about  the  great  necessity  of  Connells- 
ville  coke  going  out  to  the  world,  and  all  that  sort  of  thing.  I think  it  has 
got  to  be  got  down  to  a mathematical  basis,  as  to  whether  the  rates  we 
are  paying  are  fair  rates. 

I think  there  is  one  thiug  which  may  have  been  mentioned  by  some 
of  the  speakers  — I didn’t  come  in  until  late  — but  the  downward  haul 
from  the  lakes  to  Pittsburg  is  a very  large  factor,  and  a factor  that 
ought  to  be  considered  very  much  by  the  railroads,  in  judging  as  to  the 
comparative  fairness  of  rates.  I do  not  think  that  this  thing  should  be- 
taken up  in  any  spirit  of  rank  antagonism;  but  I imagine  that  before- 
you  get  through,  you  will  have  to  go  to  the  Interstate  Commerce  people, 
or  somebody  that  has  authority  to  settle  it.  I do  not  believe  that  any 
one  of  the  railroads  that  felt  like  making  concessions  could  very  well’ 


28 


do  it.  They  are  tied  up  by  community  of  interests  and  all  that  sort  of 
thing;  and  how  far  the  Sherman  Anti-trust  law  applies,  I don’t  know. 
But  it  is  too  big  a subject.  I think  it  should  be  taken  up  in  a very 
careful  way.  I would  be  delighted  if  some  of  our  friends  from  the  rail- 
roads would  elucidate  to  us  on  the  figures  given  by  the  gentleman  from 
Ohio,  pick  any  flaws  in  his  figures.  I do  not  think  there  are  many  in 
them  myself,  but  I am  not  expert  on  that. 

Chairman  Stevenson  : Well,  the  opportunity  is  here  for  any  one 
to  speak,  either  the  representatives  of  the  railroads  or  the  operators.  Is 
there  anything  further  to  be  said  on  the  subject,  gentlemen?  We  want 
to  move  along  with  this  meeting. 

A Voice:  Mr.  Seymour. 

Chairman  Stevenson:  Mr.  Seymour,  have  you  anything  to  say? 

Mr.  Seymour;  Division  Freight  Agent,  P.  R.  R. : I have  just  gotten 
in  the  room.  I can’t  talk  about  anything  I haven’t  heard. 

A Voice:  Mr.  Cromlich? 

Chairman  Stevenson:  Mr.  Cromlich  has  been  called  for. 

Mr.  W.  L.  Cromlich  : No,  I haven’t  anything  to  say. 

A Voice:  Mr.  Dempster. 

Chairman  Stevenson  : You  have  been  called  for  Mr.  Dempster. 

Mr.  Dempster  : I do  not  know  why  my  name  was  suggested,  except 
that  there  are  no  Pittsburgh  operators  here  of  any  account.  I would  sup- 
pose that,  they  being  the  most  interested,  they  would  be  represented 
with  due  ability  and  talent.  I see  our  genial  friend  over  there,  Mr. 
Stoneroad,  and  he  is  quite  a talker  when  he  gets  started,  and  he  is  not 
hard  to  start  sometimes.  (Laughter.) 

But,  Mr.  Chairman  and  Gentlemen,  both  of  the  coal  and  coke  and  of 
railroads,  Mr.  Manington  struck  the  keynote  when  he  intimated  that 
there  would  be  no  settlement  of  this  case  until  it  goes  to  the  legal  judge 
and  umpire  who  has  the  decision  of  the  rates.  The  Pittsburgh  district 
two  years  ago  went  into  this  question,  oh,  with  zeal.  They  were  going 
to  have  the  rate  changed  right  away,  and,  as  Mr.  Manington  says,  we 
are  still  or»  our  knees.  Now  why?  If  the  Pittsburgh  operators,  or  any 
other  operators,  can’t  help  themselves,  by  employing  the  proper  legal 
means  at  their  command  for  the  purpose  of  securing  their  price,  then 
who  is  to  blame  if  they  do  not  get  them?  That  seems  to  be  the  ques- 
tion. And  it  is  the  question  with  the  coke  people.  This  gentleman  who 
occupied  the  floor  says:  “We  are  going  to  take  down  that  pile,  stick 
by  stick,  until  we  get  to  the  bottom  and  find  out  what  is  in  that  pile.” 
That  is  the  only  way  to  get  it.  'Diat  is  a good  illustration.  That  is  the 
only  way  to  accomplish  the  end.  And  my  own  personal  opinion  is 
that  neither  the  Pittsburgh  operators,  the  Ohio  operators,  or  any  other 
operators,  will  ever  accomplish  anything  until  they  go  to  the  judge,  the 
legal  judge  who  has  the  decision  of  the  case.  That  is,  the  Interstate 
Commerce  Commission. 


29 


Now,  if  they  do  not  go  there,  then  the  fault  is  theirs.  And  why, 
why  will  they  bear  the  burden  and  wear  out  their  knees  and  trousers 
in  supplication?  That’s  the  question,  Mr.  Manington  did  tell  you  to  a 
certain  extent  about  what  they  have  done.  Instead  of  pursuing  the 
same  course  that  the  Pittsburg  operator  did,  they  went  to  the  State 
Board,  and  I do  not  know  where  it  is  now.  Mr.  Manington,  where  is 
the  question? 

Mr.  Manington  : In  the  Circuit  Court  of  the  United  States,  on 
the  question  of  jurisdiction. 

Mr.  Dempster  : That  is,  the  railroads  appealed  from  the  decision 
of  your  State  Board  to  the  Circuit  Court,  and  that  has  not  been  decided 
yet  whether  or  not  the  State  Board  had  jurisdiction  in  the  matter? 

Mr.  Manington  : Exactly. 

Mr.  Dempster:  One  step  more.  If  the  court  decides  that  the 
State  Board  had  not  jurisdiction,  then  where  are  you?  Then  your  ap- 
peal will  be  to  the  Interstate  Commerce  Commission? 

Mr.  Manington  : Then  we  will  have  to  re-try  the  whole  case  be- 
fore the  Interstate  Commerce  Commission. 

Mr.  Dempster:  In  that  case,  you  will  have  to  go  to  the  Interstate 
Commerce  Commission,  won’t  you? 

Mr.  Manington  : Yes. 

Mr.  Dempster:  And  you  will  do  it? 

Mr.  Manington  : Why,  we  are  in  the  fight  to  win. 

Mr.  Dempster:  You  have  had  two  years  of  it,  and  you  are  still 
tied  up.  Mr.  Manington,  do  you  know  what  the  status  of  the  West  Vir- 
ginia mandamus  was,  where  the  operators  went  into  court  to  restrain 
the  railroads  from  increasing  their  rates? 

Mr.  Manington  : Which  mandamus  do  you  mean  ? 

Mr.  Dempster:  I do  not  know  how  many  mandamuses  there  are. 

Mr.  Manington  : You  know  a year  ago  last  spring,  increases  in 
West  Virginia  were  enjoined,  and  those  were  finally  disposed  of  at 
different  times,  because  in  different  courts.  Then  I believe  it  was  in 
November,  the  Interstate  Commerce  Commission,  upon  application  of 
certain  operators  in  West  Virginia,  suspended  the  tariffs  on  lake  coal, 
which  had  been  filed,  effective  March  15th.  So  that  those  proposed 
new  rates  are  suspended,  and  I believe  the  Interstate  Commerce  Com- 
mission has  fixed  a date,  I have  forgotten,  within  a few  days,  for  hear- 
ing. It  has  appeared  to  me  that,  while  the  Interstate  Commerce  Com- 
mission has  that  question  of  the  increased  lake  rates  to  West  Virginia 
before  it,  this  question  of  all  the  rates,  both  commercial  and  lake, 
should  be  submitted  at  the  same  time.  And  if  this  district,  whose  turn 
it  now  is  to  move,  since  we  in  Ohio  have  been  doing  our  share,  would 
file  a complaint  there,  the  two  could  be  consolidated  and  heard  together. 

Mr.  Dempster:  And  another  question,  Mr.  Manington:  That 
rate  .has  been  suspended,  you  say,  the  increased  rate  that,  was  agreed 


30 


upon  a year  ago  last  April,  in  New  York,  by  the  railroads,  to  increase 
the  West  Virginia  rate? 

Mr.  Manington  : Yes. 

Mr.  Dempster:  That  is  the  rate  that  has  been  suspended? 

Mr.  Manington  : Yes. 

Mr.  Dempster:  Then  the  West  Virginia  people  are  getting  into* 
the  lake  market  on  the  same  rates  that  they  were  before,  and  the  dif- 
ferential has  not  been  changed,  the  change  in  the  differential  has  been 
suspended,  so  that  the  old  rates  prevail. 

Well,  Mr.  Chairman  and  gentlemen,  it  is  just  as  easy,  and  with  as- 
few  words,  to  understand  that  the  fellow  who  does  not  help  himself  is. 
not  going  to  get  help  from  the  railroad  people;  and  if  the  Pittsburgh 
operators  just  sit  back  in  a state  of  supineness  and  won’t  do  anything, 
they  can’t  expect  the  railroads  to  come  and  say,  “We  are  going  to  re- 
duce our  rates.”  You  can’t  do  it.  There  was  a time,  Mr.  Stoneroad, 
wasn’t  there,  when  a committee  was  appointed  and  went  to  a certain 
degree,  to  a certain  stage,  and  then  the  action  was  dropped? 

Mr.  Stoneroad  : I think  that  is  true. 

Mr.  Dempster:  Now,  there  we  stand.  The  Pittsburg  operators 
moved,  they  moved  with  enthusiasm,  they  went  a certain  distance,  and 
like  the  little  ball  you  may  have  seen  at  Christmas  time,  which  when 
you  threw  it  along  the  floor,  goes  a certain  distance,  and  then  comes 
back  of  its  own  accord.  There  is  where  we  are  now. 

Chairman  Stevenson  : From  what  Mr.  Dempster  says,  there  is- 
no  doubt  in  my  mind  that  there  is  a colored  gentleman  in  the  woodpile,, 
and  I do  not  see  why  the  railroad  operators  do  not  want  it  out  without 
tearing  the  pile  down,  stick  by  stick.  There  has  been  a committee  ap- 
pointed and  they  went  a certain  distance,  and  nothing  was  accomplished. 
What  is  the  trouble? 

Mr.  Dempster  : I do  not  know.  It  seems  to  have  been  a state 
of  suspension. 

Chairman  Stevenson:  What  suspended  it? 

Mr.  Boileau  : If  you  will  allow  me,  I will  tell  you  what  suspended 
the  situation.  By  the  way,  that  hearing  is  January  nth,  next  week,  of 
the  West  Virginia  operators.  The  rate  is  not  to  take  effect  until  March 
3rst. 

A Voice:  What  rate? 

Mr.  Boileau:  The  increased  rate  from  West  Virginia  to  the  lakes. 

Mr.  Dempster:  What  increased  rate? 

Mr.  Boileau:  ii,  12,  and  13  cents  a ton. 

Mr.  Dempster:  Is  that  the  rate  that  was  agreed  on  a year  ago 
last  April? 

Mr.  Boileau:  Yes,  and  they  have  been  holding  it  up. 

Chairman  Stevenson  : Do  I understand  you  to  say  that  the  Pitts- 


3i 


burg  Coal  Operators’  Association  is  not  officially  represented  at  this 
meeting  ? 

Mr.  Boileau  : It  is  not,  but  there  are  several  members  of  the  as- 
sociation here  that  are  willing  to  go  with  us.  They  told  me  personally. 

Chairman  Stevenson:  Any  other,  gentlemen  wish  to  speak? 

Mr.  Kates:  I would  like  to  ask  the  operators  why  go  to  Court? 
I believe  they  say  the  Interstate  Commerce  Commission  is  behind  in  busi- 
ness two  years.  These  corporations  say  we  must  have  our  day  in  Court. 
That  means  you  must  spend  your  life  in  court.  It  goes  to  the  Supreme 
Court  and  they  are  five  years  behind  with  their  business.  Now  what 
are  we  going  to  do  about  it?  My  solution  is  that  we  form  a new  party, 
elect  a president  who  will  declare  martial  law,  and  then  these  matters 
can  be  settled  summarily  by  a court  martial. 

If  we  do  get  a little  coal  business,  what  happens?  Do  we  increase 
our  output?  You  know  we  can’t  ship  our  coal.  We  just  get  enough 
cars  to  kill  us  off.  They  figure  it  all  out  how  many  cars  it  will  take  to 
make  money,  and  then  the  car  shortage  conspiracy  is  carried  on,  and 
they  just  give  us  cars  enough  that  we  lose  money.  That  car  shortage 
conspiracy  has  been  carried  on  for  the  last  ten  years.  The  trust  gets  all 
the  cars*  and  the  little  fellow  just  gets  enough  to  make  him  lose  money. 
What  chance  have  we  to  do  any  business?  We  must  all  go  out  of  busi- 
ness or  bob  around  like  petty  servants  to  your  big  trust.  We  must  be- 
come petty  slaves  of  every  big  trust.  And  then  if  we  ship  any  freight 
what  will  become  of  us?  The  Courts  are  rotten. 

Chairman  Stevenson  : Well,  if  any  gentleman  had  a short  cut 
we  would  like  to  hear  from  him  on  the  short  cut  now. 

Mr.  Alexander  Dempster  : There  is  one  gentleman  in  this  meet- 
ing who  knows  a good  deal  on  this  subject.  Mr.  W.  R.  Woodford. 

Chairman  Stevenson  : We  would  be  very  much  pleased  to  hear 
from  Mr.  Woodford. 

Mr.  W.  R.  Woodford  : Mr.  Chairman,  I appreciate  the  compliment 
the  gentleman  pays  me,  but  I came  here  by  invitation  and  I accepted 
only  on  the  understanding  that  I would  not  be  called  upon  to  make  any 
speech  or  make  • any  statement. 

I had  something  to  do  with  that  agitation  Mr.  Dempster  referred 
to.  But  I transferred  my  interest  at  that  time  across  the  lines  and  they 
are  all  now  in  the  state  of  Ohio  where  we  are  doing  something  and 
accomplishing  something.  Mr.  Manington  has  very  ably  stated  the  situa- 
tion as  it  exists  there. 

I am  surprised  at  not  seeing  more'  of  the  Pittsburg  operators  here: 
but  if  they  do  not  care  to  talk  themselves  I think  it  would  be  impertinent 
for  a rank  outsider  to  come  and  say  very  much,  and  I consider  myself  an 
outsider.  And  I would  therefore  not  like  to  say  anything. 

Mr.  Kates  : May  I say  one  word  more  ? I tried  to  get  a switch  in 
over  in  Ohio  for  a year  and  a half  and  gave  it  up.  Then  I went  up  into’ 


32 


Michigan  to  a little  coal  field.  They  have  a nice  six  foot  vein  of  coal 
there  in  a 150  foot  shaft.  I heard  the  same  old  song  there.  The  little 
fellows  were  all  killed  off  on  account  of  want  of  cars.  They  are  not 
shipping  out  of  that  field  today  100  cars  a day  with  a vein  six  foot  thick. 
Why  don’t  the  operators  get  it  fixed  up  ? It  is  the  same  old  story ; kill 
off  the  little  fellows ; car  shortage  and  all  that.  The  roads  would  rather 
haul  coal  300  miles  than  50  miles ; about  50  cents  would  be  the  freight 
rate  on  the  Michigan  coal  and  a dollar  and  a half  or  two  dollars  on  the 
West  Virginia  coal.  They  say  they  must  put  on  the  traffic  all  it  will  bear ; 
that  is  the  policy  of  the  railroad  and  you  know  it. 

Chairman  Stevenson  : Does  any  other  gentleman  wish  to  be  heard? 
I want  to  bring  this  fact  to  the  attention  of  the  gentlemen  present,  the 
fact  that  the  Chamber  of  Commerce  cannot  take  any  legal  action  on  this 
question  at  all.  The  policy  of  the  Chamber  of  Commerce  in  the  last  three 
years  or  four  years  has  been  to  co-operate  with  the  railroads,  and  in  so 
doing  they  have  accomplished  a great  deal.  Now  if  it  is  the  intention  of 
the  coal  operators  to  take  legal  action,  of  course  it  does  not  seem  to  me 
incumbent  upon  the  Chamber  of  Commerce  to  take  it  up,  because  we  are 
both  working  at  the  same  job  and  there  is  no  use  of  expending  too  much 
energy  when  we  have  a great  many  other  things  to  attend  to*  here  in 
Pittsburg,  as  our  Mayor  will  tell  you.  He  has  got  almost  every  man 
in  Pittsburg  to  work.  So  we  want  to  know  and  I think  we  should  know 
the  intention  of  the  coal  operators.  It  seems  to  me  that  it  is  rather  un- 
usual that  more  of  the  Pittsburg  operators  are  not  here,  but  those  who 
are  here,  if  there  is  a strong  minority  and  they  propose  to  take  any  ac- 
tion I believe  they  should  organize  and  secure  the  assistance  of  those  in 
this  district  who  are  interested.  Do  not  wait  for  the  others  to  come  in. 

Mr.  Boileau  : Mr.  Chairman,  in  presenting  this  matter  to  you  I 
have  had  several  operators  with  me  in  the  matter.  If  they  all  do  not  care 
to  participate  it  is  because  they  do  not  go  into  the  subject  very  thoroughly. 
The  operators  are  organized  enough  now.  They  do  not  need  those  de- 
linquent ones.  After  hearing  this  report  I think  the  Chamber  of  Com- 
merce of  Pittsburg  should  have  the  matter  taken  up  as  a Chamber  of 
Commerce.  We  will  help  you  with  statistics  and  with  finances  to  put  the 
thing  through.  We  do  not  need  any  organization  than  what  we  have 
already.  I have  written  authority  from  over  200  of  the  coal  men  on  this 
matter. 

Chairman  Stevenson  : This  is  a case  of  where  we  do  not  like 
Caesar  less  but  Rome  more.  If  they  are  more  interested  in  West  Vir- 
ginia than  in  the  Pittsburg  District  how  are  we  going  to  get  them  in- 
terested in  this  proposition  ? 

Mr.  Boileau  : Some  of  them  have  mines  in  West  Virginia.  One 
of  them  told  me  that  he  didn’t  care.  But  suppose  you  only  had  three 
independent  operators?  Those  that  are  not  taking  an  interest  in  this  anti 


33 


resent  our  attempt  to  do  something  are  people  who  are  not  loyal  to  our 
■constituency. 

Chairman  Stevenson  : Suppose  the  Chamber  of  Commerce,  after 
hearing  both  sides  of  this  question,  come  to  the  conclusion  that  there  is  a 
wrong,  that  there  is  a discrimination  against  the  coal  operators  in  this 
■district,  we  cannot  go  any  farther  than  that  as  a body. 

Mr.  Boileau:  Your  transportation  committee  can. 

Chairman  Stevenson  : The  Chamber  cannot  as  a Chamber. 

Mr.  Boileau  : Take  it  before  the  Interstate  Commerce  Commission 
and  thrash  it  out  there.  They  know  what  we  have  got  down  there  for  I 
have  been  in  touch  with  them.  If  you  can  suggest  any  plan  that  we 
can  work  out  we  are  willing  to  organize  but  we  have  a good  lot  of  men 
signed  up  to  push  the  thing  through  and  prove  it,  but  we  thought  the 
Chamber  of  Commerce  was  the  place  to  bring  it  up.  We  give  it  to  your 
committee  and  your  committee  report  back  and  it  is  up  to  the  people 
to  hear  the  complaint. 

Mr.  Stevenson  : We  cannot  have  large  meetings  from  this  whole 
district  like  this. 

Mr.  Boileau  : No,  we  do  not  want  you  to. 

Mr.  Stevenson  : Don’t  you  think  it  would  be  advisable  to  organize 
the  coal  operators  and  appoint  a committee  and  to  meet  with  this  com- 
mittee of  the  railroad  transportation  and  we  will  do  the  same  thing  with 
the  railroad  and  we  will  try  to  harmonize  this  matter  if  we  can. 

Mr.  Boileau:  Meet  for  the  purpose  of  what?  To  go  over  this 
subject  again  and  thresh  out  these  different  rates? 

Mr.  Stevenson:  Are  you  prepared  to  submit  all  the  data  we  want? 
If  you  think  the  case  is  all  in  why  of  course  we  will  take  the  matter  up. 

Mr.  Boileau  : We  will  furnish  you  with  maps  and  with  loads  of 
tables  made  up  in  sheets  and  in  a nice  little  bundle  that  will  cover  this 
entire  place.  And  if  that  was  presented  without  anything  else  to  the 
Interstate  Commerce  Commission  they  would  tell  us  to  go  ahead  and  pre- 
sent our  evidence.  Mr.  Manington  knows  the  way  to  get  to  them  and 
I have  been  in  touch  with  them. 

Mr.  Dempster  : I ri-se  for  information  and  ask  what  is  the  province 
of  this  committee?  As  I understand  it  it  is  a standing  committee  of  the 
Chamber  of  Commerce.  Is  that  right  or  wrong? 

Mr.  Stevenson  : That  is  correct. 

Mr.  Dempster:  Has  your  committee  then  as  such  any  right  to 
bind  the  Chamber  by  any  course  of  action  whatever? 

Mr.  Stevenson  : None  whatever. 

Mr.  Dempster:  Then  isn’t  the  proper  course  to  pursue  to  adjourn 
now  with  this  data  and  your  committee  to  formulate  their  report  from 
the  information  you  have  received  ? Then  you  can  report  your  action  to 
the  Chamber  of  Commerce  or  call  the  coal  men  together  for  further  in- 
formation if  you  want  it  and  then  let  the  Chamber  of  Commerce  take 

3* 


34 


such  action  as  it  will  in  the  matter.  Is  not  that  the  legitimate  course  to« 
pursue  ? 

Mr.  Stevenson  : Yes.  We  have  heard  one  side  of  it  only  today. 

Mr.  Dempster:  That  is  the  point,  Mr.  Chairman.  If  you  have 
heard  one  side  you  can  hear  the  other  side  any  time  you  may  fix.  Then 
when  your  committee  has  made  full  investigation  and  has  gotten  all  the 
information  it  wants  to  enable  it  to  make  an  intelligent  report  back  to 
the  Chamber  is  not  that  the  proper  course  to  pursue? 

Mr.  Stevenson:  Then  what? 

Mr.  Dempster:  Then  it  is  up  to  the  Chamber  and  you  cannot  speak 
for  the  Chamber  and  this  committee  cannot  speak  for  the  Chamber  and 
nobody  else  can. 

Mr.  Stevenson  : Now  the  policy  of  the  chamber  heretofore  has 
been  not  to  take  any  legal  action  for  the  industry.  We  cannot  do  that 
but  we  can  make  a report  and  a resolution  can  be  passed  and  the  suppli- 
cation can  go  ahead  just  the  same.  About  all  the  Chamber  of  Commerce 
can  do  under  circumstances  of  that  kind  is  to  pass  a resolution.  And  I 
did  not  know  whether  you  wanted  any  more  definite  action,  because  this 
would  seem  to  be  a proper  time  if  there  is  going  to  be  an  organization,  to 
make  the  organization  today.  We  can  carry  out  exactly  what  you  have 
outlined. 

I would  like  to  ask  any  member  of  the  committee  here  if  they  have 
anything  to  say.  Mr.  Scott  ? 

Mr.  Scott:  I do  not  think  there  is  much  left  to  be  said.  I want 
to  say  in  answer  to  Mr.  Dempster’s  suggestion  that  it  seems  to  me  this 
committee  on  transportation  does  not  want  to  shirk  any  duty.  This 
committee  does  not  want  to  shirk  any  duty  as  far  as  taking  up  the  case 
and  doing  everything  the  Chamber  of  Commerce  would  authorize  them 
to  do.  But  I want  to  say  to  the  coal  men  that  you  do  not  want  that 
kind  of  a hearing  in  this  case,  they  want  men  who  know  something  about 
the  coal  business,  who  are  familiar  with  it  and  who  can  answer  questions 
that  that  committee  cannot  answer.  They  are  not  prepared  for  that,, 
they  are  not  prepared  to  take  up  the  coal  case  even  if  the  Chamber  of 
Commerce  would  say  to  do  it.  As  I say  we  do  not  Wcint  to  shirk  any 
responsibility.  We  are  willing  to  do  anything  the  Chamber  of  Com- 
merce tells  us  to  do,  but  we  are  not  qualified;  we  do  not  know  the  coal 
business.  Mr.  Stevenson  can  tell  you  all  about  prunes  and  dried  ap- 
ples and  things  of  that  kind  and  possibly  I could  tell  you  something 
about  something  xelse  in  the  grocery  line,  but  we  have  forgotten  every- 
thing we  ever  knew  about  the  coal  business. 

Mr.  Dempster:  That  is  all  right,  but  I want  to  raise  the  legal 
position  that  this  committee  is  but  a committee  of  a larger  body,  a parent 
body,  and  such  committee  it  cannot  bind  that  parent  body.  They  are 
getting  information  to  the  best  of  their  knowledge  and  ability  and  when 
they  have  concluded  that  they  are  ready  to  report  to  the  parent  body  they 


35 


report  and  it  is  then  for  that  parent  body  to  say  what  they  will  do.  That 
is  all  you  can  do  now. 

Mr.  Stevenson  : That  is  the  situation  exactly.  Does  any  other 
gentleman  wish  to  speak? 

Mr.  Johnston,  of  the  Coal  and  Coke  Operator  of  Pittsburg:  “As 
I recall  the  incident  that  brought  this  complaint  before  your  committee 
at  the  instigation  of  some  coal  operators  it  was  because  there  was  hoc 
unity  of  action  among  the  coal  producers  in  this  community  and  inter- 
mediate competitive  communities  at  all.  But  there  are  conditions  pre- 
vailing in  the  coal  trade  today  that  threatens  not  only  the  economic 
solidity  and  stability  of  that  industry  which  ranks  fourth  in  the  amount 
of  money  invested  in  it  in.  the  United  States,  but  very  materially  threatens 
the  industrial  supremacy  of  this  community  of  which  we  are  all  so  proud. 
Though  we  were  first  here  at  the  forks  of  the  Ohio  on  the  frontier,  at 
one  time  the  greatest  distributing  point  of  the  time  and  such  for  almost 
a century,  we  have  been  exhausting  one  of  our  community  assets  and 
the  unmined  coal  now  remaining  in  the  Monongahela  Valley  at  the  rate 
of  mining  of  last  year  will  not  last  you  40  years.  This  coal  that  is  now 
being  sent  as  far  up  as  a thousand  miles  to  Duluth,  as  far  west  as  Bis- 
marck, Dakota,  and  over  into  Canada,  in  an  ever  growing  quantity,  is 
exhausting  your  community  assets.  The  United  States  Steel  Corporation 
has  expended  something  like  $20,000,000- to  erect  a great  plant  at  Gary 
and  it  is  expending  $16,000,000  at  Duluth  and  it  has  enlarged  and  ex- 
panded its  great  steel  making  plant  at  Milwaukee.  It  is  enlarging  its 
plants  in  the  Shenango  'and  Mahoning  Valleys  to  an  extent  entirely  dis- 
proportionate to  the  percentage  of  increase  of  its  manufacturing  capacity 
in  the  Pittsburg  community.  Why?  Because  of  the  freight  rates.  Be- 
cause of  the  discriminations.  We  cannot  compete  with  those  communities 
out  there  when  they  are  right  in  the  center  of  the  great  body  of  the  popu- 
lation of  this  country  and  will  therefore  be  the  great  centers  in  which 
commerce  is  conducted. 

We  have  got  to  be  awake  to  our  economic  conditions.  We  have  been 
sitting  twiddling’  our  thumbs  in  this  community  year  after  year,  expect- 
ing our  city  to  grow  and  to  go  on  growing  in  the  same  way  it  did  years 
ago.  It  will  not.  The  city  of  Buffalo,  the  city  of  Erie,  the  city  of 
Cleveland,  the  city  of  Cincinnati,  the  city  of  Dayton,  the  city  of  Canton, 
the  city  of  Parkersburg,  the  city  of  Huntington,  the  city  of  Covington, 
the  city  of  Memphis,  the  city  of  Nashville,  the  city  of  Cairo,  all  of  those 
cities  are  sending  out  through  their  commerce  bodies  circulars  asking 
for  the  location  of  manufacturers. 

What  are  we  doing?  I can  testify  from  my  personal  knowledge  that 
within  the  last  two  weeks  two  manufacturing  plants  that  ought  to  have 
been  in  Pittsburg  have  gone  elsewhere.  We  are  too  slow.  And . our 
Chamber  of  Commerce  must  wake  up.  It  is  all  well  enough  to  stand 
here  and  talk  and  talk  and  talk,  but  you  have  got  to  go  to  the  Courts  to 


36 


get  anything.  I can  remember  as  Mr.  Dempster  can,  when  in  1886  the 
coal  operators  of  this  community  had  the  presidents  of  every  railroad 
that  entered  the  city  at  that  time  in  a room  over  here  and  they  pleaded 
and  submitted  facts  and  submitted  figures,  and  what  did  they  get?  They 
got  the  cold  stare,  the  chunk  of  ice.  That  is  just  what  we  will  get  unless 
we  go  straight  to  the  Interstate  Commerce  Commission.  Every  time  the 
railroads  have  been  appealed  to  they  shift  it  over  from  one  to  another 
and  you  get  nothing.  You  have  got  to  go  to  law  about  it,  and  until  you 
are  prepared  to  do  that  you  will  get  nothing. 

Chairman  Stevenson  : Is  there  anything  further,  gentlemen? 

(On  motion  meeting  adjourned  at  4:40  P.  M.) 


t 


ADDENDA 


CHESAPEAKE  & OHIO  TONNAGES. 


Showing  Growth  of  Its  Western  Coal  Traffic  in  Ten  years. 

1900  1910 

Tidewater  and  East 2,969,000  7,824,424 

West  1,709,743  8,248,868 


LAKE  COAL  TONNAGE. 

The  shipments  from  the  different  districts  during  the  last  10  years  are  shown 
in  the  following  tables  which,  the  Pittsburg  operators  hold,  prove  how  West 
Virginia  has  developed  at  the  expense  of  the  Pittsburg  district.  In  1909,  for  in- 
stance, when  the  Pittsburg  and  Ohio  shipments  fell  off,  the  shipments  of  West 
Virginia  made  a gain,  while  in  1910  the  West  Virginia  shipments  were  practically 
doubled,  thus  showing  the  inroads  by  West  Virginia  on  the  Pittsburg  market. 


Pittsburg.  Ohio.  W.  Va. 

Year.  District.  District.  District.  Totals. 

1901  3,795,706  1,954,825  787,572  6,538,103 

1902  4,704,093  2,689,974  965, 1 769  8,359,836- 

1903  6,092,047  2,458,265  1,539,435  10,089,747 

1904  6,058,383  2,138,247  1,279,876  9,476,506 

1905  7,443,883  2,062,692  2,109,262  11,615,837 

1906  9,287,272  2,560,906  2,743,732  14,591,910 

1907  10,549,993  4,074,296  3,420,941  18,045,230 

1908  8,700,000  3,600,000  3,450,000  15,750,000 

1909  8,687,305  3,002,815  3,874,570  15,564,690 

1910  11,911,900  4,297,300  6,629,500  22,838,700 


LAKE  CARGO  COAL  RATES. 


1899 

1900 

1901 

1902 

1903 

1904 

1905 

1906 

1907 

1908 

1909 

1910 


Ohio 

Pitts. 

W.  Va. 

67£ 

70 

78| 

77£ 

80 

88| 

68 

73 

8 If 

70 

73 

81| 

80 

83 

91f 

85  88  9Gf 


In  1894-5  W.  Va.  differential  over  Ohio  was  20c;  W.  Va.  differential  over 
Pittsburg  was  17£c;  present  W.  Va.  differential  over  Ohio,  life;  over  Pittsburg,. 
8fc. 


(37) 


CHART  OF  AVERAGE  DISTANCES  TO  LAKE  PORTS  AND  RATES 


PER  TON  MILE. 

No.  8 $0.85  155 

Pittsburg  88  160 

Fairmont  £ 97  255 

Kanawha  97  351 

New  River  1.12  490 

Pocahontas  1.12  460 

Cabin  Creek  97  453 

Island  Creek  97  448 

Boomer  97  320 

Thacker  97  380 

Big  Sandy  97  420 

Marrowbone  97  490 


miles 


Mills. 

5.48 

5.50 

3.80 

2.74 

2.28 

2.43 

2.14 

2.16 

3.03 

2.55 

2.31 

1.98 


ILLINOIS  COMMERCIAL  RATES  TO  CHICAGO. 


Rate 

Rate  allowed 

proposed  by 

by  R.  R.  & 

Old  rate. 

R.  R. 

W.  Com. 

Springfield  Group. 

Average  distance,  238  miles.... 

75  cents 

85  cents 

82  cents 

Per  ton  per  mile 

3.14  mills 

3.57  mills 

3.43  mills 

Bellevue  Group. 

Average  distance,  291  miles.... 

90  cents 

100  cents 

97  cents 

Per  ton  per  mile 

3.09  mills 

3.44  mills 

3.33  mills 

Harrisburg  Group. 

Average  distance,  319  miles.... 

95  cents 

107  cents 

102  cents 

Per  ton  per  mile 

2.98  mills 

3.35  mills 

3.20  mills 

Southern  Illinois  Group. 

Average  distance,  344  miles .... 

98  cents 

110  cents 

105  cents 

Per  ton  per  mile 

2.85  mills 

3.20  mills 

3.05  mills 

Fulton  Co.  Group. 

Average  distance,  193  miles.... 

75  cents 

75  cents 

75  cents 

Per  ton  per  mile 

3.88  mills 

3.88  mills 

3.88  mills 

Danville  Group. 

Average  distance,  147  miles.... 

'67  cents 

77  cents 

74  cents 

Per  ton  per  mile 

4.56  mills 

5.24  mills 

5.00  mills 

Out  of  these  rates  to  Chicago  the  absorption 

of  switching  is 

about  10  cents 

per  ton. 


COMPARATIVE  FREIGHT  RATES  ON  COAL— SHORT  LINE  MILEAGE  USED. 


39 


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PITTSBURG  & LAKE  ERIE  FREIGHT  STATISTICS. 
For  10-year  Period — 1898  to  1907,  inclusive. 


Freight  Density  increased 5,267,123  tons  or  125% 

IRate  per  ton  mile  increased 1.5  mills  or  26% 

Average  train  load  increased 550  tons  or  95% 

Train  Mile  Earnings  (all  trains)  increased $2.91  or  117% 

<Gross  Earnings  per  Mile  increased 49,729  or  176% 

Net  Earnings  per  Mile  increased 33,131  or  402% 

.Surplus  over  fixed  Charges  per  mile  increased 32,620  or  825% 


COMPARATIVE  STATEMENT  OF  P.  & L.  E.  STATISTICS  FOR  10-YEAR  PERIOD. 
As  shown  in  Moody’s  Analysis  of  Railroad  Investments,  1909. 


42 


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43 


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